My Home Program: What we know about low-interest mortgages for 10,000 young people
Next week, it is expected to start submitting applications for the DYPA housing program "Spiti my" which will give interest-free or low-interest first home loans to young people aged 25 to 39 with income criteria.
10,000 citizens will initially benefit from this program with a budget of 500 million euros. If the budget is exhausted and there is a response in consultation with the Ministry of Finance, the program will resume covering more interested parties.
A condition for receiving the loan will be that young people have an annual net income of at least 10,000 euros and the upper limit will be 16,000 euros for singles and 24,000 euros for couples (heating allowance criteria).
Specifically: Their annual total family income, regardless of its source of origin, real and presumed, should amount to up to sixteen thousand (16,000) euros for an unmarried debtor or a widowed or separated debtor.
- Up to twenty-four thousand (24,000) euros for a married debtor or the married persons or the parties to a cohabitation agreement who submit a separate tax return or the married persons who submit a tax return or the natural persons who have entered into a cohabitation agreement and have submitted a joint tax return without children, which is increased by three thousand (3,000) euros for each child.
- For a single-parent family, the aforementioned income amounts to twenty-seven (27,000) euros, which is increased by three thousand (3,000) euros for each child after the first.
The annual total family income does not include that income, which is cumulatively exempt from income tax and the solidarity contribution.
Borrowers should also not own another home that meets their housing needs.
The next step is to invite banks to sign program agreements. Banks will then start accepting applications from those who meet the criteria.
The banks will also set the repayment period of the loan which can be from 10 to 30 years.
The benefit for those who join this program is that they will pay a mortgage installment that will be much lower than the rent corresponding to the house they have chosen, as the interest rate will correspond to a quarter of the commercial rates. It is recalled that the loan is 75% financed by the Public Employment Service (DYPA) and no interest is due on the percentage of the loan financed by DYPA, while the remaining 25% is granted by the banks. This means that 3/4 of the loan is granted interest-free, with the result that the final interest rate, which the borrower pays for the entire amount, is a quarter of the cost of a normal mortgage.
Special care is taken for those with three children and those with many children. That is, the final interest rate is euribor (quarterly) +1%, while for three children and many children, as well as couples who have 3+ children during repayment, the loan will be converted into an interest-free loan.
Thus, if the interest rate on a mortgage loan is currently 4.5%, with the "my house" program for young people it drops to 1.12%. In fact, if it is a couple with three children up to 39 years old (one of them) the interest rate will be zero, as the loan is fully covered by DYPA.
In other words, a young couple buying a house worth 100,000 euros will pay a monthly installment of 275 - 285 euros instead of 415 euros which is the installment for the same house at current market rates. The annual benefit in this case is 1680 euros.
The houses for which young people will be able to get a loan must be over 15 years old with a building permit until 2007, and not exceed 150 square meters.
The loan covers 90% of the property's commercial value compared to bank mortgages, which usually cover up to 80%. Consequently, the private participation that young people must contribute is reduced to 10% of the value of the house, instead of the 20% provided for in bank mortgage contracts.
The maximum loan amount is 150,000 euros. That is, if a house has a commercial value of 200,000 euros, the loan will be 150,000 euros.
It is also noted that:
-No guarantor is required for loan approval
-The loan agreement should be signed within eight months of the pre-approval of the loan
The purchase of the property cannot be made by a first or second degree relative of the buyer and the property will be acquired in full ownership by the buyer or, in the case of spouses or common-law partners, in >50% ownership for each of them.
