ECONOMY

Aspis stakes claim in the mortgage sector

Small as it might be in size and market share, Aspis Bank’s announcement yesterday of low mortgage interest rates tied to the floating six-month European Interbank Offer Rate (EURIBOR) showed that the bank is determined to stake out a strong presence in the highly competitive mortgage sector. The bank said the Aspis Euromortgage, which is targeted at first-time house buyers and is available only up to February 28, 2002, offers three variable interest rates. Consumers can choose from a one-year 2.8-percent fixed rate, a two-year 3.8 fixed percent rate or a three-year 5.25 fixed percent rate. Whatever the choice, following the end of the fixed interest rate period, they will be charged the floating EURIBOR six-month rate in addition to a 2.25-percent spread for the remaining period of the loan. The EURIBOR six-month rate is currently 3.32 percent. Aspis Bank’s decision to launch the unusual product underscores the tough competition in the mortgage market. Spurred on by explosive credit growth, banks have attempted to outdo each other and grab a substantial share of the sector with one new product after another and at the same time have brought rates down to eurozone levels. The most stunning announcement to date was Piraeus’s launch of a zero interest rate mortgage for a six-month period last month. The Mortgage Advantage as the product is called, offers a 3.6-percent rate for a half year at the end of the first six-month period. Consumers will be charged the basic fluctuating mortgage loan from the second year onward. Aspis Bank Chief Executive Costas Karatzas said the new product is expected to boost the bank’s share of the mortgage market, currently 5 percent. He said the Aspis Euromortgage could apply for purchases of second homes with the loan set at a minimum 20.5 million drachmas. The latest statistics from the Bank of Greece show a 35.5-percent jump in mortgages in September.