The Ministry of Finance has released a set of clarifications—structured as nine key questions and answers—regarding its newly announced legislative amendment for loans governed by Law 3869/2010 (commonly known as the Katseli Law), published on 23 June 2026. The updated framework aims to reduce monthly instalments, lower overall financial burden, and accelerate loan repayment for affected borrowers.
What Does the New Regulation Achieve?
The regulation delivers four core improvements:
- It universally applies the Supreme Court’s (Areios Pagos) ruling, eliminating the need for compliant borrowers to pursue further court action.
- It significantly reduces repayment costs: interest is now calculated solely on the monthly instalment—not on the full outstanding principal.
- It retroactively recognises excess payments made by borrowers in previous years, crediting them toward principal reduction—thereby lowering either the remaining balance or the number of future instalments.
- It fairly allocates associated costs between banks and the Hellenic Asset Management Company (HRACKLE), based on the timing of payments received.
As a result, borrowers benefit from smaller monthly payments, reduced total cost, and faster debt clearance.
How Do Borrowers Benefit?
Borrowers see immediate relief in two ways:
- From now on, they pay substantially lower monthly instalments—with interest reflecting only one month’s amount.
- Extra amounts paid over past years are formally recognised as principal repayments, leading to both lower instalments and a shorter repayment period.
A Real-World Example
Consider a borrower with an outstanding debt of €144,500 as of January 2024:
- Under the old calculation method, their monthly instalment would have been €731 for 300 months.
- Under the new method, it drops to €483—of which €482 goes toward principal repayment and just €1 toward interest.
If this borrower paid the old €731 instalment from January 2024 through June 2026 (30 months), they overpaid by €7,440—calculated as (€731 − €483) × 30. This amount is credited against future obligations. Instead of 270 remaining instalments, they’ll now pay 255 instalments of €483—plus a final adjusted payment of €266.
In total, interest payments fall dramatically—from €74,852 under the old system to just €411 under the new one.
Retroactivity: A Key Feature
Yes—the regulation includes retroactive application, one of its most significant elements. For borrowers already enrolled in and complying with an existing repayment plan, previously overpaid amounts are recognised retroactively. Notably, this retroactivity goes beyond the Areios Pagos ruling itself; it is introduced explicitly through this government legislative measure.
How Retroactivity Is Applied
The process involves calculating how much each borrower paid above the newly defined instalment amount since the start of their current arrangement. That excess sum is deducted directly from their remaining debt—reducing either the number of future instalments or the size of the final ones.