Greek banks, facing increasing competition at home, are trying to lure homebuyers with cheaper mortgages in Swiss francs, a relatively safe bet as euro interest rates rise, an executive at EFG Eurobank said. EFG Eurobank and Piraeus Bank, the first to launch Swiss currency mortgages, are offering borrowers financing at variable rates of 2.75 to 2.9 percent, cheaper than corresponding loans in euros. «We have chosen a steady currency without surprises and with a beneficial interest-rate differential,» Theodoros Kalantonis, head of mortgage lending at EFG Eurobank, Greece’s third-largest lender, told Reuters in an interview. «Historically, Swiss interest rates tend to rise more slowly than the euro and fall faster,» he said. EFG’s «Swiss mortgage» starts from a floating 2.9 percent rate, compared to 4.3 percent in euros. The loan includes protection from foreign exchange swings. Piraeus Bank launched a similar product at 2.75 percent. «Euro rates are rising, which means monthly payments are going up,» Kalantonis said. «Mortgage rates in euros currently range from about 4 to 5 percent on variable and fixed-rate products. In this environment, there is an opportunity for homebuyers to borrow funds 1-1.5 percentage points below the euro rates.» Making a comeback Loans in foreign currency became popular before Greece joined the eurozone, as borrowers found a cheaper alternative to double-digit Greek drachma interest rates in the yen and the Swiss franc. The adoption of the euro in 2001 brought a collapse in the cost of money, sparking a borrowing boom that is still going strong, feeding bank profits. The country’s relatively higher inflation has also kept real interest rates low. Now, the prospect of higher rates in the eurozone is prompting banks to look for ways to offer clients cheaper credit, albeit with some risk exposure, as they compete for market share. And with inflationary risks on the rise in the 12-nation eurozone, European Central Bank policymakers are signaling they plan no quick end to interest rate increases. «For a 30-year 100,000 home loan in Swiss francs, we are talking a monthly payment of about 430 euros versus 500 euros in a similar mortgage in euros,» Kalantonis said. Eurobank, whose first-half profits rose 41.6 percent on strong retail credit growth, has a presence in Romania, Bulgaria, Serbia and Albania. The group has recently expanded into Poland, Turkey and Ukraine.