The Central Bank of Cyprus has published updated figures on interest rates for deposits and loans.
Updated rates for new deposit contracts
According to the island nation’s main financial authority, the interest rate on household deposits with a maturity of up to one year continued to decline. In October 2025, it dropped to 1.07%, compared to 1.1% a month earlier. A similar trend was observed in deposits of non-financial corporations, where the rate fell to 1.23%, slightly below the previous 1.24%. Despite market stability, experts note that the excess liquidity in Cyprus’s banking system keeps deposit returns at some of the lowest levels in the Eurozone.
Cost of new loans: increases for consumers and mortgages
The lending sector, on the other hand, shows rising borrowing costs. Interest rates on consumer loans increased to 6.88%, up from 6.46%. Housing loans also became more expensive, rising to 3.73% from 3.63%.
The Central Bank of Cyprus emphasized that the mortgage portfolio includes a range of different loan types—from financing primary residences to loans for country homes. Each carries its own risk and pricing structure, which affects the average rate. Monthly changes in the composition of these loans influence the weighted averages regardless of whether banks raise or lower their interest rates.
Business lending: mixed dynamics
In the non-financial corporate sector, a mixed picture emerged in October. Loan rates up to €1 million increased to 4.39%, while loans above €1 million actually became cheaper, falling to 3.69% from 3.79%.
All figures refer only to new contracts, including those renegotiated between banks and borrowers.
How Cyprus compares with the Eurozone
According to the latest analysis, current lending rates in Cyprus are now almost aligned with the Eurozone median.
- For households, the difference is 0%.
- For businesses, only 0.4%.
New loan data shows a similar pattern:
- Mortgage rates for individuals are on average 0.3% cheaper than in the Eurozone.
- Corporate loan rates are only 0.1% higher.
Deposit rates, however, remain the lowest in the Eurozone. The reason is the extremely high liquidity of Cypriot banks: the Liquidity Coverage Ratio (LCR) reached a record 329% in October 2025, compared with an EU median of 183% and an average of 162%. For a small and highly competitive banking market like Cyprus, such high liquidity reduces the incentive for banks to offer higher returns on deposits.
New deposits: minimum returns persist
As with existing deposits, rates on new deposits remain the lowest in the Eurozone. The Central Bank notes that rising liquidity and the limited size of the banking sector remain the key factors suppressing deposit yields.