The Central Bank of Cyprus has published new data on banking interest rates for March 2026. According to the report, rates on new housing loans continue to decline gradually, which may support demand for real estate and mortgages on the island.
The average rate on new mortgage loans in Cyprus stood at 3.09% in March, compared with an average of 3.40% across the eurozone. This suggests that buying a home with financing in Cyprus is becoming slightly more affordable than in many other European countries. The lowest mortgage rates among major banks were offered by Alpha Bank Cyprus, Ancoria Bank, and National Bank of Greece Cyprus, ranging from 2.72% to 2.78%. Eurobank offered a rate of 3.06%, Bank of Cyprus 3.20%, and the Housing Finance Corporation 3.37%. At the same time, rates on renegotiated mortgage agreements increased to 3.34%, exceeding the eurozone average of 3.20%.
Variable Rates Remain High
Despite the overall decline in mortgage rates, variable-rate loans remain relatively expensive. The average interest rate on new housing loans with a floating rate and an initial fixed period of up to one year reached 3.78%.
The most competitive offers were once again provided by Ancoria Bank at 2.53% and National Bank of Greece Cyprus at 2.72%. Bank of Cyprus recorded the highest rate in this category at 4.53%.
Market experts note that many property buyers in Cyprus are currently choosing fixed-rate mortgages in order to avoid further fluctuations in monthly payments amid global economic uncertainty and ongoing European Central Bank policy adjustments.
Deposits in Cyprus Still Offer Lower Returns Than in Europe
Deposit returns in Cyprus remain significantly below the eurozone average. For household deposits with maturities of up to one year, the average rate was just 1.18%, compared with 1.82% across the eurozone. The highest rates for retail clients were offered by National Bank of Greece Cyprus at around 1.57%. Alpha Bank Cyprus offered 1.39%, Eurobank Cyprus 1.17%, and Bank of Cyprus only 0.87%.
The situation is similar for businesses. The average rate on corporate deposits in Cyprus was 1.39%, versus 1.94% in the eurozone. Some banks offered more attractive terms, including Ancoria Bank at 1.51% and National Bank of Greece Cyprus at 1.55%.
Financial analysts note that low deposit returns are one of the reasons why many Cyprus residents continue to invest surplus funds in real estate, which is considered a more stable and potentially more profitable asset.
Business Loans in Cyprus Remain Expensive
For companies, borrowing costs remain high, particularly for small and medium-sized enterprises. The average interest rate on business loans of up to €1 million with a floating rate stood at 4.40%, compared with a eurozone average of 3.74%.
The highest rates were recorded at Ancoria Bank at 6.35% and Societe Generale Bank Cyprus at 6.17%. Bank of Cyprus provided business loans at 4.91%, Cyprus Development Bank at 4.69%, and Alpha Bank Cyprus at 4.03%. Even large loans above €1 million remain more expensive in Cyprus than elsewhere in Europe, with an average rate of 4.10% compared with 3.36% in the eurozone.
Economists believe that elevated borrowing costs continue to constrain the development of small businesses and new investment projects on the island. At the same time, demand for commercial real estate and construction investment remains strong thanks to Cyprus’s steady economic growth and continued interest from foreign investors.
What Is Happening in the Market in 2026
As inflation gradually declines, the European Central Bank has begun cautiously easing monetary policy. This is gradually being reflected in banking interest rates in Cyprus.
However, banks remain cautious when lending to businesses, especially amid geopolitical uncertainty and rising construction and financing costs. Meanwhile, the Cyprus real estate market remains one of the most active in the region, and lower mortgage rates could provide an additional boost to housing demand in 2026.