Total pure new loans in January 2026 showed a large decrease of €377.7 million. compared to the previous month. while pure new loans for house purchase decreased by €39.7 million, according to data from the Central Bank of Cyprus.
The CBC also said that both the interest rate on consumer loans and the interest rate on loans for house purchase showed a decrease.
According to the CBC, in January 2026 pure new loans showed a decrease and reached €247.3 million (out of a total of €495.9 million in new loans) compared to €625.0 million (out of a total of €986.9 million in new loans) in the previous month.
The Central Bank of Cyprus releasedthe statistics on the average interest rates applied by monetary financial institutions (MFIs) in Cyprus on deposits and loans of euro area residents in euro, as well as data regarding volumes (amounts) of new euro denominated loans to euro area residents for the reference month of January 2026.
These statistics are included in the February 2026 edition of Monetary and Financial Statistics. In parallel, comparative data for the eurozone countries are presented in the Data Portal of the European Central Bank.
The main developments in interest rates on new deposit and loan contracts. including contracts which were renegotiated, are summarised as follows:
Deposit Rates
The interest rate on deposits from households with an agreed maturity of up to one year remained unchanged at 1.20%. compared with the previous month.
The corresponding interest rate on deposits from non-financial corporations registered an increase to 1.34%. compared with 1.27% in the previous month.
Lending Rates
The interest rate on consumer credit decreased to 7.20%, compared with 7.22% in the previous month.
The interest rate on loans for house purchase decreased to 3.70%, compared with 3.78% in the previous month.
It is noted that the portfolio of loans for house purchase of the MFIs contains various types of loans, such as loans for primary residence. for vacation houses etc., which bear different risk and interest rate.
The composition of the housing loans portfolio varies from month to month, resulting in changes to the level of the weighted average interest rate, independently of the increases or decreases of the interest rates of the MFIs, the CBC said.
The interest rate on loans to non-financial corporations for amounts up to €1 million remained unchanged at 4.32%. compared with the previous month. The interest rate on loans to non-financial corporations for amounts over €1 million registered a decrease to 4.34%. compared with 4.42% in the previous month.
Amounts of pure new loans
Pure new loans recorded a decrease to €247.3 million in January 2026 (from a total of €495.9 million), compared with €625.0 million (from a total of €986.9 million) in the previous month.
The main categories of new loans are the following: Pure new loans for consumption increased to €18.9 million (from a total of €20.1 million). compared with €17.2 million in the previous month (from a total of €18.2 million). Pure new loans for house purchase recorded a decrease to €95.7 million (from a total of €138.1 million), compared with €135.4 million in the previous month (from a total of €178.1 million).
In addition, pure new loans to non-financial corporations for amounts up to €1 million decreased to €40.1 million (from a total of €53.1 million). compared with €60.3 million in the previous month (from a total of €92.5 million) and pure new loans to non-financial corporations for amounts over €1 million registered a decrease to €88.1 million (from a total of €277.2 million). compared with €406.4 million in the previous month (from a total of €685.0 million).
Cyprus interest rates in a European context: Analysis and comparison
Loan interest rates (outstanding amounts)
The interest rate level on outstanding loans in Cyprus is close to the respective Eurozone median, with the spread standing at zero (0.0%) for households and to 0.4% for non-financial corporations.
Loan interest rates (new business)
The interest rate level on new loans in Cyprus is comparable to the Eurozone median. More specifically, the spread between the weighted average interest rate on loans to households for house purchase stands at -0.3% (lower than the Eurozone median), while the respective spread for non-financial corporations stands at 0.5%.
Deposit interest rates (outstanding amounts)
In contrast to the loans interest rates, interest rates on outstanding deposits in Cyprus are considered as outlier, standing at a lower level within the Eurozone.
The CBC said that this might be attributed to the excess liquidity of credit institutions in Cyprus, which is among the higher ones within Eurozone (indicatively, the Liquidity Coverage Ratio – LCR in Cyprus in December 2025 stood at 319%, compared with 192% (median) and 161% (mean) in European Union in September 2025), as well as to the short range of the banking sector in Cyprus.
Deposit interest rates (new business)
The interest rates on new deposits in Cyprus are standing at similar levels to interest rates on outstanding deposits due to the same reasons mentioned above, the CBC said.
Type of interest rate of loans to households for house purchase
The share of new loans tο households for house purchase with variable interest rate is aligned with the Eurozone. The said share follows a sharply declining trend in recent years.
The CBC said that from almost 100% at the beginning of 2022, it has fallen to 11.6% today, which is lower than the Eurozone median.
It added that this may be partly affected by the choice of fixed-rate lending in the early years (e.g., 3-5 years), and their subsequent conversion to a floating rate. Consequently, there is a change in the behaviour of borrowers regarding interest rate risk, an element that should be taken into account in banks' risk management policies, it pointed out.
Type of interest rate of loans to households and non-financial corporations
The share of new loans to households and non-financial corporations with floating interest rate compares favourably with the Eurozone, it said, adding that the said share follows a declining trend in recent years.
From almost 100% at the beginning of 2022. it has fallen to 64% today. which is lower than the Eurozone median. This may be partly affected by the same reason mentioned above and should be taken into account in banks' risk management policies, the CBC concluded.
(Source: CNA)
