In January 2026, interest rates in Cyprus showed mixed dynamics. Some indicators remained almost unchanged compared with the previous month, while others slightly decreased or increased. At the same time, compared with the average values in the eurozone, Cypriot banks still offer relatively low deposit rates, while the cost of loans depends on the borrower category and the type of financing.
Experts note that the situation is largely connected with the overall monetary policy of the European Central Bank. After a period of active rate increases in 2022–2024, financial markets are gradually stabilizing, however differences between eurozone countries are still noticeable.
Deposit rates in Cyprus remain low
Interest rates on bank deposits in Cyprus remain among the lowest among eurozone countries. In January 2026, the rate on term deposits with a maturity of up to one year for households was 1.2%. This indicator did not change compared with December and became the fourth lowest among countries of the monetary union.
For comparison, the average rate in the eurozone in January reached 1.78%, which is slightly higher than the December level of 1.77%. The lowest rate in the region was recorded in Slovenia — 0.74%. The highest deposit rates were offered in Italy and the Netherlands, where rates reached 2.23% and 2.21% respectively.
A similar situation is observed for corporate deposits as well. In January 2026, term deposits with a maturity of up to one year for companies in Cyprus yielded 1.34% annually. This is slightly higher than the December level of 1.27%, however the figure remains the second lowest in the eurozone. The average level across the monetary union countries amounted to 1.9%, decreasing from 1.93% in December.
The cost of loans for households slightly decreased
The average interest rate on loans for Cypriot households in January 2026 was 3.24%. In December it stood at 3.27%, so the decline was minimal. Despite this, the cost of borrowing in Cyprus remains slightly below the average level of the eurozone.
The average rate on mortgages and other loans for households in the eurozone increased to 3.35% in January compared with 3.32% a month earlier. The highest average rates were observed in Latvia — 3.89%, while the lowest were recorded in Malta — 1.99%.
Mortgage rates: different trends
In the mortgage lending segment in Cyprus, differences are also observed depending on the term of the fixed rate. For loans with a fixed rate for up to one year, the indicator decreased to 3.7% compared with 3.78% in December. At the same time, Cyprus remains in sixth place among eurozone countries in terms of such rates.
This figure turned out to be higher than the eurozone average, which in January was 3.51%. In December the corresponding average figure stood at 3.55%.
In the case of mortgage loans with a fixed rate for a period from one to five years, the rate in Cyprus was 3.05%. This is slightly higher than the December figure of 3.04%. At the same time, the country holds the fifth position among eurozone states with the lowest rates in this category. The average eurozone figure for such loans was 3.37% both in January and in December 2025.
Consumer loans remain cheaper than the eurozone average
In the consumer lending segment, rates in Cyprus are also lower than the European average. In January 2026, the interest rate on such loans was 6.3%. The average eurozone figure is significantly higher — 7.51%. Nevertheless, Cypriot rates remain noticeably higher than in some countries of the monetary union. For example, in Malta consumer loans are issued at 3.92%, and in Luxembourg — at 3.89%.
It is worth noting that in Cyprus this figure increased slightly. In December the rate was 6.21%. At the same time, the average eurozone figure increased more noticeably — from 7.16% in December 2025 to 7.51% in January.
The cost of loans for businesses decreased
For non-financial companies in Cyprus, the cost of bank loans decreased in January. The average rate on corporate loans fell from 4.21% in December to 3.82% in January.
Despite the decline, this indicator still exceeds the eurozone average, which remains at 3.57%. At the same time, the difference between loan and deposit rates remains significant.
For corporate loans up to 1 million euros, the rate in Cyprus reached 4.67%. This is significantly higher than the eurozone average, which is 3.59%.
For large loans exceeding 1 million euros, the rate is 4.38%. This figure is the fifth highest among eurozone countries, where the average level stands at 3.29%. However, compared with December it decreased, since previously it was 4.57%.
What this means for the Cyprus economy
Financial analysts note that low deposit rates continue to stimulate investment in alternative assets, including real estate. This is considered one of the reasons for the stable demand for housing and commercial properties in Cyprus.
At the same time, the gradual decline in borrowing costs may support business activity and demand for mortgages during 2026. The further dynamics of interest rates will largely depend on decisions of the European Central Bank, inflation in the eurozone, and the overall economic situation in the region.