On Friday, July 4, the Central Bank published the latest data on interest rate changes for loans and deposits in Cyprus in May 2025.
The statistics from the island nation's main financial institution show a slight decrease in interest rates on term deposits for households and non-financial corporations, as well as a decrease in consumer loan interest rates. Conversely, there was a slight increase in mortgage interest rates and in interest rates on loans to non-financial companies, particularly for amounts exceeding €1 million. Furthermore, comparative data indicate that interest rates on loans in Cyprus are similar to the euro area median.
Interest rates on deposits
The interest rate on time deposits up to one year for households decreased to 1.16% in May 2025, down from 1.26% the previous month. The corresponding rate for non-financial corporations decreased to 1.18%, down from 1.37% in April 2025.
Interest rates on loans
The interest rate on consumer loans fell to 6.77%, down from 7.06% the previous month. Conversely, the interest rate on housing loans rose to 3.81%, up from 3.78% the previous month.
The interest rate on loans to non-financial corporations for amounts up to €1 million increased to 4.67%, up from 4.65% in April 2025. Lastly, the interest rate on loans to non-financial corporations for amounts exceeding €1 million increased to 4.65%, up from 4.13% the previous month.
The new report from the Central Bank of Cyprus also provides comparative data on interest rates in Cyprus and other eurozone countries.
According to the document, the average interest rate on outstanding loans to households in May 2025 was 4.16%, which is slightly above the euro area median of 4.01%.
A similar trend was observed in the non-financial corporate lending sector, where the average rate in Cyprus was 4.46%, compared to 4.05% in the eurozone. These figures suggest that interest rates on the island are close to European standards with few significant deviations from the regional average.
The Central Bank notes that fluctuations in average interest rates are largely due to changes in loan portfolio structure, rather than solely to the dynamics of individual rates set by financial institutions. This is particularly true for housing loans; an increase or decrease in the average rate may reflect a shift in portfolio composition. For instance, this could be due to an increase in the share of higher-risk loans rather than a revision of existing agreements.