Loans still under active judicial restructuring arrangements governed by the Katseli Law are entering a new regulatory framework. A legislative amendment introduced by the Ministry of Finance—submitted to Parliament and set for vote on Wednesday, 24 June 2026—changes how interest is calculated on these loans. The shift follows a recent plenary decision by the Supreme Court (Areios Pagos).
Who qualifies for the new interest calculation?
The amendment applies specifically to Katseli Law loans where a court-ordered judicial restructuring for primary residence protection remains in effect. To qualify, the debt must still be outstanding, and the debtor must not have defaulted or been excluded from the arrangement.
Under the new rules, interest will no longer accrue on the total outstanding principal. Instead, it will be calculated solely on the court-determined monthly instalment amount. This change significantly reduces the borrower’s monthly burden.
Who falls outside the new mechanism?
Cases already concluded—including those where the debt has been fully repaid or the debtor has been formally excluded from the arrangement—do not benefit from the adjustment. Also excluded are extrajudicial settlement mechanisms and restructuring plans under Law 4605/2019. For those, the existing method remains unchanged: monthly payments continue to be calculated as amortising (capital + interest) instalments applied to the full outstanding debt.
The key dividing line: Is the arrangement still active?
The central criterion is whether the judicial restructuring remains active—that is, the debtor is still making payments in accordance with the court order and has not lost protection due to prolonged non-payment. Only in such cases does the new interest calculation apply, effectively lowering future monthly payments.
No cash refunds—but credit toward remaining debt
Borrowers who previously paid higher instalments—under the old, more burdensome interest calculation—will not receive direct reimbursements. Instead, the excess amounts already paid will be recognised as capital repayments and offset against the final instalments or the remaining balance.
Example 1: €90,000 loan
For a €90,000 debt over 240 months at 3.6% annual interest:
- Old method: ~€527/month
- New method: ~€376/month (€375 capital repayment + interest only on that amount)
- Difference: ~€151/month
If the borrower paid the higher amount for 24 months, the accumulated excess would total approximately €3,624. Under the new provision, this sum won’t be refunded in cash but will reduce upcoming obligations—potentially eliminating roughly nine to ten of the final €376 instalments.
Example 2: €120,000 loan
For a €120,000 debt over 300 months at the same rate:
- Old method: ~€607/month
- New method: ~€401/month (€400 capital repayment + limited interest)
Again, the difference reflects immediate relief in ongoing payments—and past overpayments will be credited toward the remaining debt.