The Central Bank of Cyprus has published the latest data on interest rates and lending volumes for February 2026. The statistics show positive changes for borrowers: rates across several key loan categories have declined. At the same time, banks issued more new loans compared to January.
Deposit Rates: Slight Decrease
The interest rate on household term deposits of up to one year fell slightly — from 1.2% to 1.19%. For non-financial companies, the drop was more noticeable: the rate decreased from 1.34% to 1.19%. This means that keeping money in bank accounts has become slightly less profitable, while borrowing has become more affordable.
Loans Have Become Cheaper
The average rate on consumer loans in February 2026 stood at 7.12%. For comparison, it was 7.2% in January. The decrease is small but steady. A year ago, rates were higher, so the trend toward more affordable retail lending continues.
The situation with housing loans is more complex. The Central Bank noted that the mortgage portfolio is heterogeneous: it includes loans for primary residences, holiday homes, and second properties. Each of these products carries a different level of risk and a different interest rate. The composition of the portfolio changes from month to month, which means the weighted average mortgage rate may fluctuate even without changes in banks’ base rates.
Conditions have also improved for businesses. Loans to non-financial companies of up to €1 million became cheaper, with rates falling from 4.32% to 4.22%. Loans above €1 million decreased from 4.34% to 4.15%. Large businesses traditionally access cheaper financing, and the gap remains.
Total Volume of New Loans Increased Sharply
In February 2026, banks issued new loans totaling €435.1 million. Net new loans (issued minus repayments) reached €328.7 million. For comparison, in January these figures were €495.9 million and €247.3 million, respectively. The data suggests that borrowers took out more loans, although the total volume issued decreased slightly — meaning people borrowed more and repaid less early.
Net new consumer loans in February amounted to €20.1 million (with a total of €21.1 million issued). In January, net lending stood at €18.9 million out of €20.1 million issued. The increase of nearly €1.2 million indicates solid growth. Consumers are more actively borrowing for purchases, renovations, healthcare, and other personal needs.
Net new housing loans rose to €115.1 million in February. The total amount of mortgages issued reached €151.6 million. A month earlier, net growth was €95.7 million with €138.1 million issued. This indicates that the Cyprus real estate market remains active, and banks are willing to finance homebuyers.
Small and medium-sized businesses (loans up to €1 million) received €47.5 million in net new loans in February, with total lending of €60.4 million. In January, the figures were €40.1 million and €53.1 million, respectively.
Large businesses (loans above €1 million) showed even stronger growth: net new lending jumped to €137.3 million (with €191.6 million issued), compared to €88.1 million in January (with €277.2 million issued). Notably, in January banks issued significantly more to large businesses, but almost the same amount was repaid. In February, issuance was lower, but net growth was higher — companies are actively using credit lines rather than simply refinancing old debts.
Why This Matters for Borrowers and Depositors
Lower loan rates make borrowing more accessible. If you are planning to take out a consumer loan, mortgage, or business loan, conditions are slightly better now than a month ago. Even small percentage differences can lead to significant savings on large amounts.
Depositors should keep in mind that deposit rates are declining along with lending rates. It may be worth considering higher-yield investment options or locking in current rates for a longer term. The Central Bank of Cyprus publishes statistics monthly, so keeping track of updates can help you make informed financial decisions.