Hellenic Bank announced a reduction in key interest rates on loans, which will affect private borrowers and businesses in Cyprus directly. This decision is part of a broader trend of easing credit conditions in response to changes in European monetary policy and slowing inflation in the eurozone.
The new rates for key loan products are as follows
In particular, Hellenic Bank's base interest rate has decreased from 4.18% to 3.94%. The base interest rate on business loans and overdrafts has decreased from 3.18% to 2.94%. The fixed mortgage rate has been reduced from 2.58% to 2.34%, and the floating rate has been reduced from 3.43% to 3.19%.
Which loans are affected by the changes?
The reduced rates apply to loan commitments transferred to Hellenic Bank from the former Cooperative Central Bank and Gordian Holdings Ltd. This applies to corporate and retail borrowers whose agreements are linked to the aforementioned base rates.
The bank clarifies that loans with completed repayment terms are not subject to the changes. If the agreement establishes a minimum rate threshold, the reduction will only apply if the new rate exceeds this threshold.
Economic Context and Impact on Cyprus
The reduction in interest rates in August 2025 could significantly boost the Cypriot economy. More affordable loans could support the real estate market, increase turnover in small and medium-sized businesses, and attract additional investment.
Against the backdrop of growing competition in the Cypriot banking sector, Hellenic Bank's rate cut may prompt other banks to follow suit. This would reduce the overall debt burden on households and businesses in the long run. Analysts note that easing credit conditions is important because the European Union is facing an economic slowdown, and Cyprus needs to attract foreign investors and ensure sustainable domestic growth.