“Brake” in mortgage installment charges banks are preparing with a floating interest rate in anticipation of further interest rate hikes by the ECB, taking measures to stem a new wave of “red” loans.

The plan that is on the table of the government, but not yet locked, foresees a ceiling of 2.85% on the base interest rates (one- and three-month Euribor, libor and ECB base rate), which is the basis for calculating the monthly installment of loans with floating interest rate. In particular, the installments of mortgage loans, with a floating interest rate, for up-to-date borrowers until the end of 2022 are temporarily frozen at the levels that were established in March. Thus, the mortgage loan installment of 100,000 euros for 20 years, which has reached 669 today from 511 euros in the summer, will not increase any more.

At the same time, the Ministry of Finance is expanding by 30% the income and property criteria so that more households can enter the subsidizing scheme of half the monthly burden of the speculative loan installment that the banks are already implementing.

“We’re probably not done, there will be more increases in 2023. I think they won’t be excessive but yes we will be in a high interest rate environment. The banking system is looking for additional solutions in the coming days,” said Finance Minister Christos Staikouras.

According to information, the announcements are expected by the beginning of next week.