In August 2025, the banking sector in Cyprus showed mixed trends: deposit rates remained among the lowest in the eurozone, while loan rates continued to rise, exceeding the European average in several categories.
Deposits: Cyprus Among Eurozone Laggards
According to the Central Bank of Cyprus, the average rate on household term deposits up to one year in August was only 1.08%, the second-lowest in the eurozone. By comparison, the eurozone average in the same month was 1.71%.
For businesses, the situation was similar: company deposits up to one year yielded 1.15%, the lowest result in the eurozone. Meanwhile, countries like Italy and the Netherlands offered businesses returns of over 2%.
Economists note that such low deposit rates in Cyprus are largely due to local banks’ policies, which aim to keep liquidity costs low amid high credit activity.
Loan Rates: Higher Costs for Housing and Business
The average household loan rate in Cyprus in August was 3.34%, slightly above the eurozone average of 3.31%. Mortgages with a fixed rate up to one year cost borrowers 3.91%, ranking fifth in terms of expense among eurozone countries.
For business loans, the situation was even more challenging. The average rate for non-financial companies rose from 4.06% in July to 4.14% in August, significantly above the eurozone average of 3.46%. Loans over €1 million increased to 4.27%, making them the third most expensive in the eurozone.
Consumer Loans Become More Affordable
Against the backdrop of costly mortgages and business loans, consumer loans in Cyprus appear relatively cheaper. The average rate in August was 6.38%, below the eurozone average of 7.51%. However, compared to countries like Malta (3.33%) and Luxembourg (4.26%), Cyprus remains an expensive market for borrowers.
Trends and Forecasts
Financial analysts note that the gap between low deposit rates and high loan rates may negatively affect economic activity and household savings. As the European Central Bank gradually adjusts monetary policy, further changes in credit conditions are expected in Cyprus, especially in the mortgage and business loan segments.
According to Eurostat, in the first half of 2025, Cyprus recorded a 2% annual increase in housing prices, which further strains borrowers and makes access to affordable credit an increasingly important factor for the economy.