Data released by the Central Bank of Cyprus (CBC) reveals a period of relative calm for the island’s banking sector in February 2026. Interest rates for both savings and mortgages remained largely stable just weeks before the outbreak of regional conflict and the European Central Bank’s (ECB) decision to pause rate hikes.
Market analysts suggest this stability provided a brief window of predictability for consumers, even as individual banks made minor tactical adjustments to their portfolios.
Savings: Slight cooling in deposit yields
The average return for new term deposits with a maturity of up to one year saw a marginal dip, falling from 1.20% in January to 1.19% in February. While the overall change was minimal, the performance varied significantly between institutions.
Bank by Bank Deposit Trends:
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Downwards: The National Bank of Greece (Cyprus) led the decline, dropping from 1.67% to 1.61%. Bank of Cyprus also reduced its rate to 0.81%, while Eurobank and Ancoria saw slight decreases.
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Upwards: Defying the trend, Cyprus Development Bank boosted its offering to 1.28%, and Alpha Bank nudged its rate up to 1.43%.
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Steady: The Housing Finance Organization (HFO) remained among the lowest, adjusting slightly to 0.84%.
Mortgages: Borrowing costs reach a plateau
For those looking to enter the property market, home loan rates remained remarkably consistent. The average interest rate for housing loans stood firm at 3.04%, identical to the previous month.
| Bank | February Mortgage Rate | Trend vs. January |
| Cyprus Development Bank | 2.18% | Lowest in market |
| Alpha Bank | 2.76% | Significant decrease |
| Bank of Cyprus | 3.19% | Slight decrease |
| Ancoria Bank | 3.38% | Significant increase |
| Housing Finance Org. | 3.41% | Unchanged |
| Societe Generale | 5.14% | Highest in market |
Outlook: The Wait and See Period
These February figures represent the final set of data before major geopolitical events in the Middle East introduced new inflationary risks. On March 19, the ECB opted to keep its benchmark rates steady to monitor these pressures, with the next critical decision scheduled for April 30.
While February was characterized by containment of borrowing costs, the divergence between banks, such as Ancoria’s sharp hike versus Alpha Bank’s notable cut, suggests that competition for high quality borrowers remains active despite the broader market stabilization.
Source: Stockwatch.com.cy