Cyprus Deposit Rates Fall While Housing Loan Costs Rise in June, Central Bank Reports

Interest rates on deposits in Cyprus continued their downward slide in June 2025, while housing loan costs edged higher, according to the latest report released this week by the Central Bank of Cyprus (CBC). The bank stated that the publication of these figures aims to “promote transparency and help consumers and businesses make informed comparisons.”

The data revealed a consistent decline in deposit rates across the board, affecting both household and corporate savings. Simultaneously, interest rates on new housing and business loans moved in the opposite direction, highlighting not only substantial variability across banking institutions but also a widening disparity in lending costs compared to the eurozone average.

In particular, term deposits in euro of up to one year from households saw a gentle but noticeable decline. The weighted average rate offered by all Monetary Financial Institutions (MFIs) dropped to 1.13 per cent in June 2025, compared with 1.16 per cent in May and 1.26 per cent in April. This placed Cyprus well below the eurozone average, which stood at 1.77 per cent in June. Nonetheless, interest rates varied widely depending on the bank. “The highest deposit rates in June were offered by Eurobank Cyprus at 1.50 per cent,” the data confirmed. Jordan Ahli Bank PLC maintained a rate of 1.38 per cent. At the lower end, Societe Generale Bank Cyprus posted the weakest rate at 0.62 per cent.

Some of Cyprus’ largest banks also made significant downward adjustments. Bank of Cyprus trimmed its household deposit rate from 0.86 per cent in April to 0.66 per cent in June. Meanwhile, Hellenic Bank’s rate remained nearly unchanged, staying below the 1 per cent mark.

A similar downward trend was evident in term deposits of up to one year from non-financial corporations. The average rate for all MFIs in Cyprus held steady at 1.18 per cent in June, unchanged from May, but significantly lower than April’s figure of 1.37 per cent. Again, Cyprus lagged the eurozone average, which stood at 1.93 per cent.

Societe Generale Bank Cyprus topped the list for corporate deposit rates, offering 1.70 per cent in June. Eurobank Cyprus followed with 1.08 per cent, while the Cyprus Development Bank and Bank of Cyprus recorded 1.03 per cent and 1.18 per cent respectively. At the lower end of the spectrum, the Cyprus Housing Finance Corporation and Astrobank posted 0.71 per cent and 0.91 per cent respectively. Alpha Bank Cyprus also showed a notable adjustment, decreasing its rate from 1.71 per cent in May to 1.47 per cent in June, after a sharp rise the previous month.

In contrast to deposit rates, interest rates for new housing loans continued to climb. New housing loans with variable interest rates and an initial fixed period of up to one year saw their weighted average rate rise to 3.97 per cent in June, up from 3.74 per cent in May and 3.71 per cent in April. “Bank of Cyprus remains the most expensive, with a rate of 5.00 per cent for new contracts,” the central bank confirmed. Ancoria Bank followed with a rate of 3.32 per cent, while the Cyprus Housing Finance Corporation posted 3.79 per cent.

Some banks offered far more competitive terms. Astrobank significantly dropped its rate to 2.21 per cent in June, compared to 3.01 per cent in May. Alpha Bank Cyprus also reported a favourable rate of 2.57 per cent.

As for renegotiated housing loans, a slight dip was recorded in the average rate, which fell to 3.88 per cent in June, from 3.90 per cent in May. “Ancoria Bank offers the highest rate for renegotiations at 4.94 per cent,” the figures showed. Bank of Cyprus followed closely at 3.97 per cent. Alpha Bank Cyprus entered the renegotiation category with a more moderate rate of 2.99 per cent.

The combined index covering both new and renegotiated housing loans demonstrated a continued rise. It increased from 3.78 per cent in April to 3.81 per cent in May and reached 3.95 per cent in June. In contrast, the eurozone saw a declining trend during the same period, with the average rate falling to 3.61 per cent from 3.70 per cent in May.

Turning to business loans, new loans to non-financial corporations for amounts up to €1 million with variable rates and initial fixed periods of up to one year saw a clear reduction in average interest rates. The weighted average fell to 4.56 per cent in June, down from 4.84 per cent in May and 4.90 per cent in April. “Banque SBA offers the highest rate at 6.37 per cent,” according to the central bank’s data. Astrobank also remained at the high end, offering 5.94 per cent. On the lower end, Alpha Bank Cyprus and Hellenic Bank offered more affordable options at 3.54 per cent and 4.15 per cent respectively.

Renegotiated business loans showed an even more pronounced decrease. The average rate dropped to 3.80 per cent in June from 4.12 per cent in both April and May. Among the banks, Astrobank stood out with the highest renegotiated rate at 5.61 per cent, while Hellenic Bank offered the lowest at 3.01 per cent. Bank of Cyprus posted a 5.00 per cent rate, and Eurobank came in at 4.51 per cent.

When aggregating all loan activities under €1 million to non-financial companies—including both new and renegotiated loans—the overall interest rate in Cyprus fell to 4.39 per cent in June, from 4.67 per cent in May and 4.65 per cent in April. This still left Cypriot businesses paying significantly more than their eurozone counterparts, where the average rate declined to 3.73 per cent in June.

For loans over €1 million, a modest decline was also evident. The weighted average rate for new loan contracts in this category dropped to 4.01 per cent in June, compared with 4.51 per cent in May and 4.34 per cent in April. Astrobank provided the highest rate at 5.56 per cent, while Eurobank Cyprus Ltd and Bank of Cyprus were at the lower end, offering 3.86 per cent and 3.59 per cent respectively. Hellenic Bank and the National Bank of Greece (Cyprus) came in closer to the average, posting rates of 4.28 per cent and 4.03 per cent respectively.

In the case of renegotiated loans over €1 million, the average rate saw an increase to 4.11 per cent in June, from 3.99 per cent in April and after peaking at 4.71 per cent in May. In June, Hellenic Bank offered a renegotiation rate of 4.40 per cent, while Eurobank Cyprus Ltd presented a more competitive 3.57 per cent. Bank of Cyprus reported 4.46 per cent. Notably, Alpha Bank Cyprus Ltd significantly lowered its renegotiated rate to 3.14 per cent in June from 4.38 per cent in April.

Taking into account all new loan activities over €1 million, both new contracts and renegotiations, the average interest rate in Cyprus stood at 4.04 per cent in June 2025, compared to a lower 3.32 per cent across the eurozone, highlighting the persistent divergence in borrowing costs between Cyprus and its European peers.

By fLEXI tEAM