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Getting a Mortgage in Cyprus

Contrary to some press reports obtaining a mortgage in Cyprus is a very straightforward procedure. The majority of banks on the island provide homebuyers / investors with mortgage products in Cyprus Pounds and in a number of foreign currencies. To protect your own financial interests it is advisable to take out a mortgage in the currency of your main income. This will prevent fluctuations in the exchange rate affecting the cost of your mortgage repayments.

Typical mortgage terms offered by Cypriot lenders include borrowing of up to 70% of the property value at an interest rate of between 2% - 3% above the base. Foreign currency mortgages taken out by non Cypriot residents are normally limited to a repayment term of 10 years.

The lender is likely to levy an arrangement fee for the mortgage. It is common practice to allow for a charge of between 0.5% - 1% of the total amount borrowed. Generally speaking this arrangement fee can be added onto the balance of the mortgage.

As part of the purchasing procedure the arranged mortgage must be 'declared' at the District Office or the Land's Office. This can be done in person or by an agent appointed on behalf of the buyer, such as a conveyancer. Declaration takes place by completing Form N271 (Contract and Declaration of Mortgage), which is presented at the office along with any required stamp duty. Stamp duty is levied at a rate of 0.15% for the first 100,000 Cyprus Pounds, and at 0.20% thereafter.

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