Greece: Katseli Law borrowers to receive lower monthly installments

Thousands of borrowers who have restructured their debts under the Katseli Law in Greece are expected to receive new repayment schedules by the end of the year. This change follows a recent decision by the Supreme Court, which mandates a new method for calculating interest.

Under the new ruling, interest will be calculated based on the monthly installment amount rather than the total outstanding debt. For example, on a 100,000 euro loan with a 1,000 euro monthly installment, interest will now apply to the 1,000 euro portion instead of the full 100,000 euro balance. This adjustment is expected to significantly reduce monthly payments for eligible borrowers.

In one illustrative case, a 100,000 euro loan with a 20-year term and a 4.5% interest rate would see monthly installments drop from 616 euros to 417 euros, providing an annual saving of 1,428 euros. The new schedules are expected to be sent out by servicers by the end of 2024, offering financial relief to households facing rising housing and rental costs.