CBC: In May consumer credit interest rate drops to 6.77%,

In May 2025, the interest rate on consumer credit decreased to 6.77%, compared with 7.06% in the previous month, while the interest rate on loans for house purchase increased to 3.81%, compared with 3.78% in the previous month.

This was according to the statistics on the average interest rates applied by monetary financial institutions (MFIs) in Cyprus, released by the Central Bank of Cyprus (CBC).

Pure new loans recorded a decrease to €297.8 million in May 2025 (from a total of €714.4 million), compared with €324.7 million (from a total of €682.2 million) in the previous month. 

The Central Bank of Cyprus has released the statistics on the average interest rates applied by 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 May 2025.

According to the data, the interest rate on deposits from households with an agreed maturity of up to one year recorded a decrease to 1.16%, compared with 1.26% in the previous month.

The corresponding interest rate on deposits from non-financial corporations registered a decrease to 1.18%, compared with 1.37% in the previous month.

As regards lending rates, the interest rate on consumer credit decreased to 6.77%, compared with 7.06% in the previous month.

The interest rate on loans for house purchase “increased slightly” to 3.81%, 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 residences, 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 Central Bank added. 

The interest rate on loans to non-financial corporations for amounts up to €1 million increased slightly to 4.67%, compared with 4.65% in the previous month. The interest rate on loans to non-financial corporations for amounts over €1 million registered an increase to 4.65%, compared with 4.13% in the previous month.

“In comparison with the other euro area countries, the interest rate level in Cyprus is close to the respective median of eurozone,” the CBC said. More specifically, in May 2025 the interest rate on outstanding loans to households stood at 4.16%, compared with 4.01% for the eurozone countries. Moreover, the interest rate on outstanding loans to non-financial corporations stood at 4.46%, compared with 4.05% for the eurozone countries.

According to the data, pure new loans recorded a decrease to €297.8 million in May 2025 (from a total of €714.4 million), compared with €32.7 million (from a total of €682.2 million) in the previous month. Analysing the main categories of new loans, it is noted that pure new loans for consumption increased to €23.5 million (from a total of €26.9 million), compared with €20.7 million in the previous month (from a total of €21.8 million). 

Pure new loans for house purchase recorded an increase to €123.9 million (from a total of €205.5 million), compared with €98.2 million in the previous month (from a total of €161.8 million).

Pure new loans to non-financial corporations for amounts up to €1 million increased to €59.8 million (from a total of €91.6 million), compared with €37.9 million in the previous month (from a total of €68.5 million).

Furthermore, pure new loans to non-financial corporations for amounts over €1 million registered a decrease to €82.6 million (from a total of €379.7 million), compared with €159.2 million in the previous month (from a total of €414.2 million).

(Source: CNA)