There’s been a notable shift in Cyprus’ financial landscape this April, as the latest figures from the Central Bank of Cyprus (CBC) show a dip in both deposit and lending interest rates, making it a potentially smart moment for buyers and borrowers to consider their options.
Lower Interest Rates = Good News for Borrowers
Let’s start with the silver lining: borrowing just got a bit more affordable.
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Housing loan interest rates dropped to 3.78%, down from 4.56% in March. That’s a significant shift, especially for those considering buying their primary home or even a vacation getaway.
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Consumer loans also saw a drop, with rates falling from 7.40% to 7.06%.
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Loans for businesses (up to €1 million) eased slightly too, going from 4.96% down to 4.65%.
However, interest on large-scale corporate loans (over €1 million) went up to 4.13%, from 3.87% – likely reflecting the different risk dynamics at play for big commercial deals.
Deposit Rates Also Shifted
On the savings side:
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Households saw a small drop in deposit interest rates, now at 1.26% (down from 1.41%).
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Meanwhile, non-financial corporations actually got a small boost on deposits, with rates rising to 1.37% from 1.31%.
What’s Going On With Lending Volumes?
Total new loans across all categories dropped to €682.2 million in April, down from €964.2 million the month before.
Here’s a quick breakdown:
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Housing loans decreased to €161.8 million (of which €98.2 million were brand-new, not refinanced).
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Consumer loans slipped to €21.8 million.
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Business loans up to €1 million dropped to €68.5 million.
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Large business loans over €1 million took the biggest dive – from €661.9 million in March to €414.2 million in April.
So, what’s the takeaway? Fewer people and businesses are borrowing right now – likely due to economic caution or seasonality – but those who are, especially homebuyers, are getting better interest rates.
Looking Ahead: A Market in Adjustment
The CBC emphasized that fluctuations in average interest rates, especially for housing, are often driven by the types of loans issued in a given month – meaning the composition of the portfolio can shift the averages, regardless of rate changes.
Still, the overall tone here is opportunity. For anyone planning to finance a home or personal project, these slightly lower rates might be just the nudge needed to explore what’s out there.
Source: Stockwatch.com.cy