Cyprus banks respond to proposed protection for vulnerable primary homeowners

In mid-September 2026, the Association of Cyprus Banks responded positively to a formal appeal by European Parliament member Michalis Hadjipantela regarding the enhanced protection of primary residences for vulnerable, consistent borrowers. The initiative follows the European Parliament’s 2025 Banking Union annual report, approved on March 30, 2026, which highlights the need for stronger social safety nets for households facing financial difficulties.

Hadjipantela, representing the EPP and DISY, specifically advocated for a policy prohibiting the foreclosure of primary residences for vulnerable borrowers who have already repaid at least 50% of their housing loans. In his correspondence to the Association, the MEP requested that European guidelines be integrated into local practices, considering factors such as the household's economic status, the size of the property, and the progress of loan repayment.

The Association of Cyprus Banks has acknowledged the importance of these recommendations, confirming that its members strictly adhere to existing EU directives and guidance from the European Banking Authority and the Central Bank of Cyprus. The Association expressed a willingness to engage in a constructive dialogue to explore how these principles can be further implemented. Financial institutions maintain that they systematically monitor mortgage portfolios and communicate with households experiencing temporary financial distress to assess viable restructuring options.