Bank of Cyprus and Brexit

Wow, that's nasty!

I guess you have thought about getting a mortgage against your UK home (if you have the equity) and clearing this loan? I don't think there is any chance any other Cyprus bank will step in.

Selling is difficult as UK residents now face significant hurdles when buying property in Cyprus.

Thanks - its not the best news to say the least!  At least its not 2022!

I am working reduced hours due to the pandemic and not currently resident in the UK either.   

My current expat contract is due to end in Dec 21 so I can't raise a mortgage without a long term role and I don't think the UK banks would lend either.

I may return to the UK in 2022 but it depends on work opportunities etc.

Wow that's a really sh*t position to be in

I've no idea what the answer is to it

Thanks - I don't want to be forced into a sale either as a retirement in Cyprus was the long term plan at the time we purchased it, that and summer holidays away from the UK.

If you are interested in letting short term or setting the property up for a holiday let get in touch with me

Can they do this legally..... i think a lawyer may be your own recourse

what is in your mortgage agreement regarding their early termination.. are they penalised in any way (am sure if you terminated early you would be penalised)  there must be some legal protection.

Have you done something or has something happened other than Brexit (as that seems to me to be a convenient means to reduce their balance sheet of NPLs) that would force them to take such an action as am sure you are not the only british property owner with a mortgage here in Cyprus whether it be BoC or any other bank

All banks in Cyprus are regulated by the ECB and the CBC under the provisions of the Credit Business Law and relevant EU regulations and directives. All banks established in Cyprus are privately owned, commercial banks

Remember, very few mortgage loans contain a clause allowing for acceleration of the loan unless the borrower does something. Generally, the lender cannot decide to call in a loan at random. A borrower likely would avoid a mortgage agreement that would give the lender such power.


I would be taking some legal advice asap

No all payments on time and actually made a few small overpayments of 400 euro reducing balance by about 2k

I hope you don't think I was suggesting it but just needed to ask ... it seems a strange action to take

Don't worry no offence taken, they did ask in January for information about our financial situation, which due to the Pandemic was not great, but not so bad that we could not make the loan payments etc.   So it could be they are targetting us in some way in response to that snapshot.  The letter just refers to various Brexit conditions between the UK and EU.

A lot of bank accounts have been closed in the UK for the same reasons, seems possible it is the same thing the other way around.

Sounds very strange to me maybe it's to do with passporting between banks uk to Cyprus

Yes but surely there are 1,000's of people with holiday home mortgages with BOC and others.

I would seek legal advice, please keep the forum in the loop. I am still trying to get my head around this. Damn Brexit!!

I absolutely agree with you

have you taken this up with your bank by personal phone call

BoC do seem to be a law unto themselves

I will ask about to see if anyone else has had  similar

If you are on Facebook, you could ask in British in Europe group. Or if you would like, I can ask for you?

Just a thought ... could it be a scam is the communication real and verified with boc

Exactly what I was thinking a scam because I would think the bank would be in breach of the contract on the mortgage  as long as the mortgage requirements are met eg payments and any requaments made on the mortgage new windows roof ect it just doesn't sit right brexit or not

the comments I have had from a few people I know is that you should firstly and as a priority speak directly to your lender (BoC). I feel that this is the most appropriate to confirm the letter as genuine and get the lowdown from the Bank.

If it is genuine then go and get legal advice

Toon wrote:

the comments I have had from a few people I know is that you should firstly and as a priority speak directly to your lender (BoC). I feel that this is the most appropriate to confirm the letter as genuine and get the lowdown from the Bank.

If it is genuine then go and get legal advice

I have heard it has happened a few times? Maybe its a computer generated letter? But yes, talk to an actual person and get an actual reason!

a further thought

do you have title deed and is the property subject to any developer related issues  - or maybe subject to NPL legislations

So I wonder what the BoC are doing with all those people who they sold mortgages too who were EU nationals BUT CYPRUS WERE NOT
OR
maybe its about credit being stopped for UK residents in 2025 as one person has had a letter about that but unrelated to mortgage

I'm a dual national - British / Cypriot - and I have exactly the same situation. I physically went to Cyprus in December to meet with my bank manager to discuss it and he presented me with 35 pages of documents in Greek I need to sign apparently to remove the overdraft facility which isn't even being used. I don't believe that many pages relate to removing an account facility so I refused to sign and brought the paperwork back to the U.K. to have it translated. Am now going through that process. Will update as I find out more. When I told him I was half Cypriot with dual nationality he said it didn't matter as I didn't domicile in Cyprus or pay tax there.

An update - BOC are saying if we can prove we are no longer UK residents we can keep the mortgage.

My wife is Ukrainian so an option is to change our contact details to UA.  BOC are vague about what evidence needs to be provided to evidence any change of status.

Has anyone had any luck with that approach?

If things were better in UA we would seriously consider moving there (but with potential war pending that is not an option) and meanwhile we have currently moved back to the UK as my expat visa expired.   Changing countries again and schools is not something we can take lightly as we have kids 12 and 13 and their education is our priority.

I have started a new role which is paying well, so can at least make larger overpayments monthly whilst we figure out what to do next.

Bank being vague -  changing the address details to another may give you breathing space but its not entirely legal in terms of banking codes of operation

I would think they want any sort of proof that you are no longer a UK resident.. residency here or residency in Ukraine, or anywhere else for that matter, I dont think there is anything to stop you being resident in both other countries simultaneously but thats going to take time and effort and of course being here in cyprus too although at lot of the donkeywork can be done remotely with a local assistant and only be here for the actual "in-person" interview 

renting the property  out is not a great option for any Non-eu person as thats not legal albeit it is common and the authorities here dont want to impact on tourism... so they let it slide

you could of course setup a company here and run it that way quite legally...

@HighlandSpring I also am in a similar situation. However, I have checked the legal basis on which the bank is claiming it can no longer provide services, and this is incorrect. The relevant financial services laws of England refer to the requirement to wind down "regulated activities" in the UK. Only mortgages coveting UK property are regulated activities and therefore there is no legal requirement for the bank to wind down this mortgage.

@HighlandSpring apologies I was unfortunately reading an older version of the relevant regulations. These are the FSMA (Regulated Activities) Order 2001 and unfortunately it appears overseas mortgaged are covered but there are certain exceptions that one can hopefully restructure a mortgage to. I am looking into this.

@HighlandSpring Apologies for yet another (last) message however I am a lawyer and have been now looked into this in detail. I believe that a mortgage over Cyprus property if entered into prior to 21 March 2016 is not a regulated mortgage contract for the purposes of the FSMA 2000 (Regulated Activities) Order 2001. This is because section 61(5) states that mortgages granted before such date only qualify if they were regulated mortgages at that time. As the previous version of the Order applied at that time, this covered only UK property.

This position is confirmed by the relevant FCA guidance at www.handbook.fca.org.uk/handbook/PERG/4/4.html

and

www.handbook.fca.org.uk/handbook/PERG/4.pdf

@Guest8754 hope you don't mind me hopping on but we are in the same situation having received a letter like the original poster mentioned.

Have you challenged the situation with the bank having looked into it in detail?

Any advice or further info welcome.