The extension of the “Bridge” program, with a reduction in subsidies in October-December this year, was announced by the Greek Ministry of Finance.
According to the regulation, in the last quarter of the program, current mortgage payments are subsidized by 40%. The subsidy in effect today started at 90% of the loan payment and was reduced to 70% in the third quarter.
Subsidizing debts on first-residence mortgages for those who have joined the Finance Ministry’s Bridge 1 program, which subsidizes installment loans to borrowers affected by the pandemic, is cut by about half. This is more than 74,000 borrowers who took out a mortgage loan for their first home, payments on which are subsidized by the state for nine months. This measure was launched at the end of August last year, with a deadline for joining at the end of December last year, and ends for most borrowers at the end of September. As announced, the Γέφυρα program will be extended for another three months, until the end of 2021.
The relevant regulation was announced by Prime Minister Kyriakos Mitsotakis on ΔΕΘ, and the order is expected – after agreement with the institutions – to be submitted to parliament in the coming days.
According to the information, the regulation provides:
• 40% subsidy from the state for one quarter of loans. The current subsidy started at 90% of the loan payment and was reduced to 70% in the last, that is, in the third, quarter.
• 35% subsidy from the state for a quarter of problem loans. The subsidy in its current form started at 80% of the loan payment and was reduced to 60% during the third quarter.
• Subsidy of 20% of repaid loans. It started at 60% of the loan payment and was reduced to 30% in the last quarter.
Bridge 1 has so far offered substantial support to households, and has also assisted banks in their efforts to repay loans to debtors stranded by the pandemic crisis or loans that are already overdue. Recall that inclusion in the “Bridge” program assumes that after the end of the grant, the borrowers will have to pay the entire monthly installment on the loan for a period of 6-18 months, depending on its category. Otherwise, they will have to return the government subsidy. This ensures that loans will continue to be serviced after the end of the government subsidy program, which in most cases expires at the end of September.
According to the latest figures from the Ministry of Finance, payments under the Bridge 1 program reached a total of 20.4 million euros and corresponds to a subsidy of 115,447 loans and 73,704 recipients. Taking into account the previous eight payment stages, from November to December 2020 and from January to June 2021, the total amount of the government grant paid out to date is 185.5 million euros. By the end of September, when 90% of the Bridge 1 payments are subsidized, the government will have paid around € 230 million, leaving € 70 million unallocated from the € 300 million total budget allocated for the program. Thanks to the support of the funds, the subsidies will last until the end of 2021.