Nearly 10,000 borrowers are expected to benefit from this decision

The Bank of Cyprus on Friday announced that it has “swiftly reacted to the European Central Bank’s (ECB) latest decision to cut interest rates,” announcing a reduction in the reference rate for loans linked to the ECB’s base rate.

According to the announcement, effective from December 18, 2024, the rate will decrease by 0.25 percentage points, dropping from 3.40 per cent to 3.15 per cent.

This reduction, the bank pointed out, is expected to provide significant relief to approximately 10,000 borrowers whose loans are tied to the ECB base rate.

“Their monthly repayments will see an immediate decrease,” the bank said.

“Since the ECB began lowering interest rates in June 2024, the cumulative reduction amounts to 1.35 percentage points, down from 4.50 per cent to 3.15 per cent,” it added.

Additionally, the bank highlighted that earlier interest rate reductions have already benefitted around 8,000 borrowers with mortgages linked to the Euribor rate.

The Euribor, which peaked at 4.14 per cent in October 2023, has gradually fallen to its current level of 2.64 per cent.

Moreover, the bank mentioned that “the downward trend in interest rates is expected to continue“.

“Recent ECB statistics reveal that interest rates on loans to households in Cyprus dropped by 0.69 percentage points between January and October 2024, a steeper decline compared to the EU average of just 0.32 percentage points over the same period,” it added.

The Bank of Cyprus also said that “it will continue to support the local economy, businesses, and households by offering competitive interest rates and attractive financing terms”.

“During the recent period of rising interest rates, the bank adjusted loan terms for thousands of its customers, helping them manage increased repayment obligations,” the bank concluded.