Cyprus housing loans down to €96m as lending volumes contract

The Central Bank of Cyprus (CBC) on Thursday released new data on average interest rates and loan volumes for August 2025, highlighting a slowdown in lending activity and contrasting trends in borrowing costs across different sectors.

The data, included in the CBC’s September 2025 edition of monetary and financial statistics, covered rates applied by monetary financial institutions (MFIs) in Cyprus on deposits and loans of euro area residents.

The latest report also included information on volumes of new euro denominated loans, while comparative eurozone data were also published through the European Central Bank’s (ECB) data portal.

In terms of deposits, the interest rate on household deposits with an agreed maturity of up to one year remained unchanged at 1.08 per cent compared with July 2025.

The rate on deposits from non-financial corporations, however, fell to 1.15 per cent, down from 1.21 per cent in the previous month.

Lending rates showed a mixed picture. The rate on consumer credit dropped to 7.09 per cent, compared with 7.40 per cent in July 2025.

Loans for house purchase rose to 3.91 per cent from 3.87 per cent, reflecting variations in the composition of the housing loan portfolio, which includes loans for primary residences, holiday homes, and other categories that carry different levels of risk.

The CBC stated that changes in portfolio composition can influence the average rate regardless of shifts in the underlying interest rates of MFIs.

The interest rate on loans to non-financial corporations for amounts up to €1 million declined to 4.19 per cent, down from 4.29 per cent in July 2025.

For larger loans exceeding €1m, the rate edged higher to 4.30 per cent, compared with 4.29 per cent previously.

New lending volumes contracted sharply. Pure new loans fell to €245.5m in August 2025 from €445.3m in July 2025.

Within this total, consumer loans decreased to €20.4m, down from €24.9m the previous month.

Moreover, housing loans dropped to €96.3m, compared with €125.1m in July 2025.

Loans to non-financial corporations up to €1m fell to €38.1m, from €57.3m in the prior month, while loans exceeding €1m recorded a steep decline to €83.9m, compared with €230.9m.

When placed in a broader eurozone context, Cyprus’ loan rates remain close to the euro area median.

In August 2025, the average rate on outstanding loans to households was 3.98 per cent, compared with 3.95 per cent across the euro area.

For non-financial corporations, the average rate was 4.26 per cent, above the euro area average of 3.78 per cent.