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Government and banks strike deal on protection of “main residence”

The Greek government and representatives of the country’s four systemic banks have finally agreed on the issue of debtors and the protection of the ‘first residence’.

After weeks of negotiations, the government and the banks agreed on the framework that will protect the first residence of defaulting borrowers.

The criteria for borrowers to be integrated in the new scheme are:

  • Outstanding debt does not exceed 130,000 euros.
  • Taxable value of the first residence, the so-called “objective value” should not exceed 250,000 euros.
  • Family income is up to 30,000 euros.
  • Borrowers with income up to 20,000 euros will be able to have the possibility to have part of the installments to be paid covered by the state.
  • Borrowers will be charged with a 2% interest rate.
  • Repayment period will be up to 25 years.
  • If the balance of their loan exceeds 120% of the first residence value, it is possible that part of their due will be written off.

An online platform will be set up and there borrowers will submit their application in order to participate in the new Law that will facilitate them to repay their loans and mortgages.

It is estimated that the new scheme will cover 90% of the red mortgages for the first residence.

Before being implemented in real life, the Government-Banks deal has to be submitted to Greece’s lenders for approval. then the Palriament will vote for it and if everything goes by plan the scheme will be implemented as of 1. March 2019.

The new scheme will replace the so-called Katseli-Law that was introduced during the economic crisis years.

Next to notorious “bad payers” thousands of Greeks found themselves unable to repay their mortgage and loans due to the economic crisis.

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