Cypriot households and small businesses are under mounting pressure from rising loan installments, the President of the Association for the Protection of Borrowers (SYPRODAT), Kostas Melas, said. He stressed the need for targeted schemes that take into account low youth incomes to help young people secure housing.

Mr Melas said borrowers have faced continuous challenges since early 2025, noting that interest rates “remain high” despite ECB cuts, while the cost of living absorbs much of households’ income. Many borrowers struggle to pay installments on time, and others do so only through “constant sacrifices”.

According to SYPRODAT, the pressure stems from a combination of high interest rates, low wages and pensions, steep rents and rising property prices.

These factors make repayment difficult and fuel “insecurity and disappointment” among borrowers.

Young borrowers hoping to obtain housing or business loans face stricter terms and higher borrowing costs, which deter many from applying. Small businesses encounter similar hurdles.

Banks and credit-acquiring firms offer restructurings and extended repayment periods but, Mr Melas said, many borrowers either cannot meet the terms or find the procedures too complex.

Mr Melas argued that young people need targeted housing support—such as subsidised interest rates, flexible repayment terms and temporary rent assistance—otherwise home ownership will remain out of reach for many.

He warned that the risk of increased foreclosures “exists and persists”, especially if financial pressure continues and sustainable solutions are not found.

The difficulty of repaying loans, he added, has significant social consequences, affecting families’ wellbeing, trust in the banking system and even decisions about marriage and having children.

The prospects for borrowers will depend mainly on interest-rate trends and decisions by banks, credit-acquiring firms and the Government.

“If borrowing terms become more accessible and support measures more targeted, citizens will finally be able to breathe,” Mr Melas said.