The choice of confidence of the fixed interest rate give banks to borrowers Their “Step Up” mortgage programs today, that is, low -tranquil loans at first and significantly increasing installments afterwards. In about 50,000 mortgages in this category, banks allow them to reduce their interest rate.
Specifically, the proposal includes the conversion to a interest -bearing loan, either at a privileged fixed rate or at a floating rate with a ceiling, that is, a ceiling at its height. The “Step Up” houses were mainly given during the financial crisis, but also during the Covid period, satisfying the need for thousands of borrowers – it is estimated that 1 in 4 housing borrowers belongs to this category – to remain aware and continue to serve their obligations. Initially a low dose was set, which is gradually increasing every years, with a pre -agreed rate.
As the loan approaches its expiration, the borrower is in danger of being found with a high capital amount that will be forced to pay cumulatively. By converting the loan into a interest -free loan, it will be called upon to pay a higher installment compared to the current, which will be 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.
The choice now given by banks and which will reportedly communicate to borrowers in the near future, provides stability and relieves the significant burden of service costs in the process for smoother management of their finances and their family budget.
For banks that are borne by the cost of reducing the interest rate and conversion of the loan, the benefit is that they ensure the smooth repayment of loans they have in their portfolios.
In this context, each bank will contact its customers by proposing its own terms of change in loan agreements, utilizing all communication channels, such as shop networks and services.