The Central Bank of Malta has postponed imposing a stricter down payment on those individuals who sought to buy their second home until 1 July 2021.
In a press statement, the Central Bank of Malta explained that amendments were introduced to Directive 16 which specified that those who wanted to buy a second property (Category II buyers), the percentage on the down payment was due to increase to 35% as from 1 July 2020 however, this will be postponed to 1 July 2021. The minimum percentage on the down payment currently stands at 15%.
This amendment will affect mainly those who have a primary residence.
The bank said that it understood that the outbreak of the coronavirus in Malta has had a negative impact on the real estate market. It also acknowledged the disruptions brought about by social distancing in banking and notarial services, as well as the pressure the outbreak has had on households’ income and cash buffers.
The Central Bank has also temporarily eased restrictions on the maximum extent of the permitted repayment burden by borrowers for a temporary period of time.
The extent was set at 40% of the applicant’s monthly income. This limit is being relaxed for a period of six months, provided that the borrower can demonstrate that the exceeding of this limit is temporary. This concession is totally at the discretion of the lender.
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