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Renegotiating Swiss Franc Mortgages in Cyprus.

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If you have an existing Housing Loan in Cyprus in the Swiss Franc denomination (CHF) taken out for the purchase of an immoveable property in Cyprus, you may now be looking, or being encouraged by the bank in Cyprus, to renegotiate the terms of the Loan to achieve a more manageable agreement. However, it is important to understand all of the financial and legal implications of such a restructure on any current or future legal case you may have.

  • Many of the deals that we have seen being offered to clients by Cypriot Banks aren’t as good as they initially look. It may be tempting to accept something that initially looks like it is a good deal or which gives you a bit of financial breathing space in the short term, but on closer inspection some of the deals offered by the banks in Cyprus are not as good as they initially appear.
  • If certain legal conditions apply, we are the foremost legal firm challenging for hundreds of clients in the Cyprus courts the very basis upon which these Swiss Franc Mortgages exist. If however you agree to a re-negotiated deal with the Cyprus Bank then you will be required to sign new loan documents. The Bank in Cyprus will then take the opportunity of making sure that this time the paperwork is compliant and this will, in turn, mean that you cannot challenge the mortgage on the basis of previously defective documentation – i.e. you are cutting off some of the legal options available to you. We have sadly encountered clients who rushed into re- negotiated deals without receiving any detailed legal advice as to the finality of the documents they were being provided with, and have effectively “waived” their legal rights and cannot now raise any legal claims.

Swiss Franc and padlock

  • It is therefore vital that you consider whether you are going to be able to comply with the terms of the new deal offered by the Bank in Cyprus. There is little point in re-negotiating a new agreement with the bank only to find that in a few months you cannot afford the new terms either. This is not only a waste of time, but it also means the bank will now have tighter documentation when they inevitably pursue clients for non-payment. Re-negotiating with the Bank in Cyprus and signing new loan documents simply confirms your new agreement with the bank and this is useful ammunition for the Bank in any subsequent litigation against you.  

It is advisable that you seek independent legal and financial advice as to the impact of any new deal being offered before accepting it.

If you would like to speak to a member of our legal team in relation to Swiss Franc Mortgages in Cyprus you can contact us.

Disclaimer – International legal issues are a complex area of law and this information is no substitute for independent legal advice on an individual basis taking into consideration your personal circumstances and legal requirements. This information is provided to provide general information only and was correct at the time of publishing. The legal position in relation to international transactions can change frequently and this page may not have been updated following any changes in the law. You should therefore not rely on this information and should seek legal advice in relation to your personal circumstances.