Banks have agreed to freeze further increases in mortgage rates in order to stabilize the burden on households from further increases in mortgage rates at current levels.

Alfa-Bank and Eurobank seem to have agreed on this measure so far. Other banks are expected to take similar action as they each follow their own policies. According to reports, the target date when interest rates will be frozen is March 31, and it will apply to all types of euribor, i.e. linked to the base rate of the ECB. It should be noted that the 3-month euribor at the end of March was 3.03%.

At each interest rate, based on the agreed key date, each bank will calculate the margin (spread) agreed with the borrower and the loan payment will be calculated. Bank sources say the measure effectively makes all mortgage interest rates fixed for a fixed term, which will reportedly last for 12 months.

If during this period there is a de-escalation of interest rates, then the reduction will, of course, be applied in the interests of the client. The costs are borne by the banks, and in the opinion of the banks, they do not concern new loans, and, of course, loans with a fixed interest rate. It is noted that the total amount of mortgage loans is estimated at 29.5 billion euros, but this amount applies to all loans, current or not.

Source: Moneyreview