Compensation for Mortgage Borrowers: Key Details

At the beginning of this year, amendments to the Consumer Rights Protection Law came into effect, providing support for mortgage loan borrowers in the form of compensation of 30% of mortgage loan interest payments in 2024. Compensation for the first quarter of the year was paid in April, and in July, mortgage borrowers will receive the next compensation for interest paid in the second quarter. We have collected the most important information that support recipients should know.

To help ease the burden of increased loan payments due to EURIBOR interest rates, mortgage borrowers will receive quarterly interest compensations in 2024. The amount of support is calculated as 30% of the interest payments made in the quarter, as long as it does not exceed 2% of the total interest rate.

Eligibility Criteria for Support:

• The mortgage loan agreement was signed by October 31, 2023.
• The remaining mortgage balance does not exceed 250,000 euros.
• The collateral is a mortgage, and the borrower is a consumer.
• The interest compensation is 30% of the interest payments made in the quarter.
• The compensation does not exceed 2 percentage points of the total interest rate for the period.

Please Note the Following:

• Borrowers with fixed-rate loans are not eligible for support.
• Compensation will only be provided if loan interest is being paid.
• Compensation applies only to the interest on the loan and does not cover the principal amount.
• Compensation is not subject to deductions, other payments, or debt collection. 

Payment Process

To receive support, mortgage borrowers do not need to apply separately because the interest compensation will be automatically calculated and paid to all who meet the specified criteria.

Mortgage borrowers will receive compensation four times in total: in April, July, and October 2024, and in January 2025.

Support is calculated and paid once per quarter. How does it work? Mortgage lenders will calculate the amount of compensation once a quarter and provide information to the State Revenue Service (SRS) about the borrower's account to which the compensation amount should be transferred. According to the law, the lender must provide information about each eligible borrower by the 10th day of the month following the quarter. The SRS will transfer the calculated compensation amount to the same account from which monthly loan payments are deducted by the end of the month.

For example, compensation for the first quarter of the year was paid by the end of April, while compensation for the second quarter will be received by the end of July.

Information about the calculated compensation amount and the account to which it will be paid will be available in your mortgage servicing account's online banking after each quarter.

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