Banks in Cyprus continue to offer their customers higher interest rates on loans but less favourable conditions on deposits than in most euro area countries.
This was reported by the European Central Bank (ECB) on Wednesday 6th February.
In particular, according to the latest data, the average mortgage rate in Cyprus rose from 4.5 per cent in November 2024 to 4.75 per cent in December 2024, well above the eurozone average of 4.15 per cent.Only Slovenia (4.97%), the Netherlands (4.85%) and Germany (4.78%) fared worse with higher lending rates.
It is worth noting that interest rates on other loan categories also increased in Cyprus: on consumer loans - to 7.2 per cent, on business loans up to €1 million - to 5.11 per cent and on business loans over €1 million - to 4.82 per cent.Incidentally, despite political pressure on banks to reduce borrowing costs, interest rates in Cyprus continue to rise rapidly.
The opposite trend is observed for deposits. Cyprus has been among the countries with the lowest deposit rates in the euro area for several months.
Data for December 2000 show that the average interest rate on time deposits of up to one year for households in Cyprus fell to 1.78%, compared with the euro area average of 2.45%. Estonia (3.12%) and Italy (2.97%) offer the highest deposit rates to their citizens.
These are the countries that top the ECB ranking. On the other hand, the average interest rate on deposits for companies in the euro area was 2.29% in December, compared with 1.74% in Cyprus. These indicators show that Cypriot depositors do not keep their savings in the most favourable conditions and do not receive adequate remuneration for the funds invested.