Interest rates in the Cypriot banking sector showed subtle mixed movements in October 2025, according to the latest statistics from the Central Bank of Cyprus (CBC). While the cost of new mortgages and corporate loans experienced a slight upward tick, the average interest paid on both household and corporate deposits registered a marginal decrease.
Lending Rates: Slight Increase in Borrowing Costs
The average interest rate for new housing loans taken out by Eurozone residents in Euros recorded a small rise in October, continuing the trend of increasing borrowing costs:
-
Mortgage Rate: The average rate for new house purchases rose to 3.08% in October, up from 3.03% in September. This is still below the broader Eurozone average of 3.33%.
-
Specific Institutions: Bank of Cyprus had a rate of 3.23% (up from 3.16%), and the Housing Finance Corporation recorded the highest rate at 3.37% (up from 3.35%).
-
Small Business Loans: The average rate for new loans to businesses up to €1 million also saw a slight increase, reaching 4.25% in October, up from 4.20% the previous month.
Deposit Rates: Households See Returns Decline
Interest rates offered by credit institutions on new term deposits saw a general dip during the month:
-
Household Deposits: The average interest rate for household term deposits (up to 1 year) decreased slightly to 1.07%, down from 1.10% in September. This remains significantly lower than the Eurozone average of 1.77%.
-
The most competitive rate offered to households was 2.00% by the Arab Jordan Investment Bank.
-
-
Corporate Deposits: The average rate for term deposits (up to 1 year) for companies also saw a marginal dip to 1.23%, down from 1.24% in September. The highest corporate deposit rate was recorded at 1.72% by the Cyprus Development Bank.
The data suggests that while the Central Bank maintained a stable stance, individual credit institutions are fine-tuning their balance sheets, marginally increasing the cost of borrowing while slightly reducing the incentive for new household savings.
Source: Stockwatch.com.cy