Cyprus is poised to reopen its “Mortgage-to-Rent” scheme for a limited period, in a move aimed at easing pressure on distressed homeowners.
Finance Minister Makis Keravnos signalled to Parliament’s Finance Committee that the government is open to accepting new applications for several months, provided the existing eligibility criteria remain unchanged.
Maintaining the current framework is seen as essential to avoid a fresh approval process from European authorities, an outcome officials are keen to avoid due to time constraints and the risk of rejection.
The proposal to revive the Mortgage-to-Rent scheme was put forward by MPs and has been met with a positive response from the ministry, so long as it does not place additional strain on public finances.
Foreclosure reform bills tabled in parliament
At the same time, two key bills targeting Cyprus’ foreclosure framework have been formally submitted to the House of Representatives. The legislation, approved by the Council of Ministers earlier this week, is designed to support borrowers and prevent the loss of primary residences.
Central to the reforms is the strengthening of the Financial Ombudsman’s role, alongside enhanced protections for homeowners. Lawmakers were briefed during a closed-door session of the Finance Committee, reflecting the sensitivity of the issue.
Stronger protections for borrowers
Among the proposed measures is the introduction of binding decisions by the Financial Ombudsman for disputes of up to €20,000, which covers the majority of cases, according to government data. Borrowers would also gain earlier access to the Ombudsman to facilitate debt verification and restructuring.
In addition, the reforms provide for the creation of structured repayment plans through insolvency advisers, allowing borrowers more time to stabilise their finances and avoid foreclosure.
Balancing stability and social pressures
Keravnos stressed that safeguarding financial stability remains the government’s overriding priority, particularly amid global economic uncertainty and inflationary risks. He cautioned against measures that could unsettle the economy or undermine growth.
Political divisions persist
Despite broad agreement on the need for reform, political tensions remain. Opposition figures have criticised the government for resisting broader legal rights for borrowers to challenge foreclosures in court.
Debate is expected to intensify in the coming days, with several party-backed proposals also under consideration before Parliament potentially dissolves ahead of upcoming elections.
