Options to borrowers those who have floating mortgages interest rate With low dose at the beginning and significantly increasing doses then, the so -called “Step Up” programs offer or will offer banks who have these loans in their portfolio.
According to converging estimates by banks with these loans in their portfolio, about 50,000 customers are given or will be allowed to reduce their interest rate, while freeing them from the significant burden of service costs in the course of their financial management and financial management.
The mortgage loans of this category were mainly given during the financial crisis, as they would allow borrowers to remain aware, serving their loans in difficult conditions with installments in their measures. Initially, with these programs a low dose was set, which the borrower could serve in difficult times, while this dose is gradually increasing every years, with a pre -agreed rate.
In borrowers with “Step Up” mortgages, those of the banks still have them in their portfolio suggests that they turn their loan
- to interest -bearing interest rate
- or at a floating rate that will have a maximum of its height (ceiling).
In this way, as bank executives point out, among other things, they give the borrower of the fixed interest rate environment and relieves him of the possibility of being found with a high capital height forced to pay the expiry. It will be called upon to pay a more increased installment compared to the current, which is significantly lower than the installments it will be called upon to pay in the coming years, as long as the “step up” loan is moving towards its expiration.
Banks that make these options to borrowers, as bank executives point out, bear the cost of reducing the interest rate and conversion of the loan, thereby ensuring that the loans will continue to be repaid smoothly, while the borrower has the benefit.
At this stage, some of the banks in their portfolio these loans communicate with their customers either through shop networks or through servicers, each proposing their own terms of change in loan agreements to interest -bearing plans with privileged terms and simple procedures. Actions are expected to intensify next time, through other communication channels, with the aim of a significant amount of these loans being converted until mid -2026.