Leasing – a new hypostasis of mortgage

The opportunity to get a house as an investment or as a private residence, without resorting to bank loans through leasing, is now available in Greece.

This became possible thanks to government decree, which went into effect at the beginning of the year and was designed to expand the opportunities available for both private and commercial property exploitation. Under the terms of the regulation, a party may also use a leased asset to obtain liquidity and finance other needs, or invest in other property. This option can replace direct loans or traditional form of property rentalavoiding the risks that this form entails buying property in Greece.

Leasing is a widely used method abroad, not only for commercial purposes, but also for individuals. According to market professionals, it is ideal for those who do not have the necessary capital to buy their own home. Until recently, the legislation allowed only the commercial use of this capability, but this has not been expanded, which has opened up the possibility for leasing companies and banks to create special products for this particular market.

The mechanism is simple and allows any person who has chosen a property and wishes to purchase it, to apply to a leasing company that will buy it on his or her behalf and then rent it out. Instead of paying the mortgage to the bank, the client will pay rent to the leasing company for a certain period of time specified in the relevant agreement.

The real estate becomes the property of the client after payment of all lease payments with a certain percentage, which, according to market experts, will be close to the mortgage interest, i.e. about 3-4%, also depending on the creditworthiness of each client.

The biggest advantage of the leasing method when buying a house lies mainly in the fact that the client can bypass the obligation have a significant portion of the capital required to purchaseto get a mortgage loan. Now the real estate buyer’s own funds must be 30% or even 40% of the property value in order to reduce the risk of the bank, and with leasing, the company retains ownership until full repayment, which allows it to significantly reduce the initial amount, down to zero.



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