Net new loans in Cyprus fell by €18.5 million in October to €429.4 million, mainly due to a slowdown in lending to companies, while housing loans continued to rise, according to data published this week by the Central Bank of Cyprus (CBC).

Total new loans reached €624.9m, compared with €770.5m in September, when net new lending had stood at €447.9m.

According to the CBC, the monthly decline reflected weaker corporate borrowing, even as households continued to take out more loans for home purchases.

Net new housing loans increased to €117.5m in October, out of €158.7m in new contracts, compared with €112.9m in the previous month.

Consumer lending also strengthened, with net new consumer loans rising to €23.7m, from €21.2m in September.

By contrast, new lending to non-financial companies eased. Loans up to €1m decreased to €50.8m, out of €68.3m in new contracts, compared with €62.7m a month earlier.

Loans above €1m also declined to €232m, out of €359.6m in new contracts, from €246.7m in September.

Meanwhile, interest rates on most new loan categories increased.

The consumer loan rate rose to 6.88 per cent, from 6.46 per cent in the previous month, while the mortgage rate moved to 3.73 per cent, compared with 3.63 per cent.

The CBC noted that the mortgage portfolio includes different types of housing credit, such as first-home loans and holiday-home loans, each carrying distinct risk profiles.

As a result, the weighted average may shift from month to month regardless of banks’ pricing decisions.

The interest rate for loans to non-financial companies up to €1m increased to 4.39 per cent, from 4.32 per cent, while the rate for loans above €1m fell to 3.69 per cent, from 3.79 per cent.

Deposit interest rates moved only marginally.

Household time deposits of up to one year slipped to 1.07 per cent, from 1.10 per cent in the previous month, while the rate for deposits from non-financial companies edged down to 1.23 per cent, from 1.24 per cent.

The CBC also compared Cypriot and European interest rates, noting that lending rates on existing balances in Cyprus remain close to the Eurozone median, with no margin for households and a narrow margin of 0.4 per cent for non-financial companies.

For new business, Cypriot loan rates are similarly aligned. The weighted average margin for new housing loans stands at -0.3 per cent, below the Eurozone median, while the margin for non-financial companies is limited to 0.1 per cent.

However, deposit rates continue to diverge. Both existing and new deposit rates in Cyprus remain the lowest in the Eurozone, a gap the CBC attributed to the very high liquidity of Cypriot banks and the limited size of the domestic market.

The liquidity coverage ratio reached 329 per cent in October 2025, far above the Eurozone median of 183 per cent and the EU average of 162 per cent.

The figures include new and renegotiated contracts, as noted by the CBC.