ATHENS (Reuters) – Greek banks will subsidise part of the recent interest rate increases for vulnerable mortgage borrowers, officials said on Wednesday.
About 30,000 vulnerable households that are servicing their mortgage loans to banks will be eligible for a subsidy that covers 50% of the interest rate increases since July.
“We received the proposal from the banks and they will make the relevant announcements with all the details in the coming days,” a finance ministry official told reporters after a meeting of Finance Minister Christos Staikouras with bank CEOs.
He said the plan had received the banking regulator’s approval without providing more details.
A second source told Reuters that the cost for the four systemic banks – National Bank of Greece, Eurobank, Piraeus Bank and Alpha Bank – will be limited to “a few tens of millions”.
The European Central Bank has raised interest rates three times since June to rein in inflation and analysts expect one more hike on Thursday.
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The average floating interest rate for a mortgage loan in Greece is now at 4.0%, up from about 2.8% in July.
(Reporting by Lefteris Papadimas; Editing by Gareth Jones)