Interest rates for house loans increase in March 2023

Interest rates for housing loans increased by 1.25 per cent in March 2023, compared to February 2023, according to the most recent data published by the Central Bank of Cyprus (CBC).

The rise in interest rates for housing loans comes at the same time as interest rates for corporate loans also increased.

Conversely, interest rates for household deposits decreased by 0.12 per cent, while interest rates for business deposits increased.

Looking at lending rates, the interest rate on consumer loans decreased to 5.05 per cent in March 2023, compared to 5.17 per cent in the previous month.

However, the interest rate on home loans rose sharply to 4.67 per cent, compared to 3.42 per cent in February 2023.

This increase in interest rates for home loans may have an impact on the real estate market, as higher borrowing costs could discourage potential home buyers from taking out mortgages.

Interest rates for loans to non-financial companies for amounts up to €1 million showed an increase to 5.60 per cent in March 2023, compared to 4.85 per cent in February 2023.

Meanwhile, the interest rate for loans to non-financial companies for amounts above €1 million registered an increase to 5.29 per cent in March 2023, compared to 4.54 per cent the previous month.

This rise in interest rates for corporate loans could make it more expensive for businesses to borrow money, which may slow down investment and expansion plans.

Turning to deposit rates, the interest rate for deposits with a term of up to one year from households decreased to 0.47 per cent in March 2023, compared to 0.59 per cent in February 2023.

However, the corresponding interest rate for deposits from non-financial companies showed an increase to 1.12 per cent in March 2023, compared to 0.69 per cent the previous month.

This could encourage more companies to deposit their funds in banks rather than invest in other areas.