The Central Bank of Cyprus published the latest interest rate statistics for June 2025. According to the regulator, the cost of consumer and mortgage loans continues to rise in Cyprus. The average interest rate on consumer loans increased from 6.77% in May to 7.01%. Mortgage loans also became more expensive, with the rate rising from 3.81% in the previous month to 3.95%. This increase is explained by market rate dynamics and changes in the structure of the mortgage portfolio, which includes loans for primary residences, secondary residences, and country homes. These categories carry different levels of risk, which is reflected in the final rate.
Business loans have become cheaper
Unlike the consumer market, businesses have been given a reprieve: interest rates on corporate loans have fallen. For loans of up to €1 million, the rate fell from 4.67% to 4.39%; for larger amounts, it fell from 4.65% to 4.04%. This decline may stimulate the activity of small and medium-sized businesses, especially given high inflation and limited access to financing in other EU countries.
Deposits: Stability without surprises
Interest rates on deposits remained virtually unchanged from the previous month. Annual term deposits for individuals decreased slightly, from 1.16% to 1.13%. For non-financial companies, the rate remained at 1.18%. This indicates stabilization in the banking sector despite volatility in the lending market.
How Cyprus looks against the backdrop of the Eurozone?
Compared to other Eurozone countries, interest rates in Cyprus are slightly above average. Existing loans to households on the island carry an interest rate of 4.09% per annum, while the Eurozone average is 4%. There is also a difference in corporate loans: 4.36% in Cyprus compared to 3.92% in the EU. These differences may be due to higher credit risk, limited competition among banks, or the specific nature of the local economic model.