Overview Of August Developments

The Central Bank of Cyprus (CBC) has released its August 2025 report outlining the performance of deposit and loan interest rates across all credit institutions. Notably, household deposit rates have remained constant while business deposit rates experienced a decline. Meanwhile, the average mortgage rate increased and business loan rates saw a modest reduction, signaling evolving conditions in the financial sector.

Mortgage Loan Rates Rise Amid Competitive Dynamics

The CBC data indicates that the average interest rate for housing loans to Euro area residents increased from 3.90% in July 2025 to 4.01% in August 2025. The Bank of Cyprus recorded the highest rate of 4.64%, although this figure marked a decrease from 4.96% in the previous month. In contrast, Alpha Bank Cyprus offered the most competitive rate at 2.27%, down from 3.29%. Other key players, including the Housing Finance Corporation and Hellenic Bank, reported rates of 3.67%, while Ancoria Bank’s average rate shifted from 3.22% to 3.63%.

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Business Loan Rates Experience A Subtle Decline

The report also highlights a marginal drop in the average rate on new business loans up to €1 million, decreasing from 4.46% in July 2025 to 4.44% in August 2025. Despite this overall reduction, institution-specific variations were evident. Astrobank, for instance, posted a peak rate of 6.45%, an increase from 5.75%, whereas Hellenic Bank maintained competitive lending with a rate of 3.72%, down from 3.88%. Banque SBA and Societe Generale also displayed mixed trends, while the Bank of Cyprus showed a modest decrease from 4.96% to 4.91%.

Household And Business Deposits: Divergent Movements

In the deposit sector, the average interest rate on household time deposits with maturities up to one year remained steady at 1.08% in August 2025, aligning closely with the broader euro area average of 1.71%. The National Bank of Greece (Cyprus) led with a rate of 1.47%, whereas the Housing Finance Corporation continued to offer the lowest rate at 0.75%.

For business deposits, the average rate decreased by six basis points to 1.15%, compared to 1.21% in the previous month. Alpha Bank remained at the forefront with a rate of 1.41%, while the Housing Finance Corporation again reported the lowest rate, now at 0.21%. Hellenic Bank and Ancoria Bank both registered a rate of 1.30%, with additional institutions like Astrobank, Eurobank, the Cyprus Development Bank, and the Bank of Cyprus reflecting consistent adjustments in their rates.

Conclusion

The CBC’s August report illustrates a nuanced financial landscape in Cyprus. With household deposit rates holding steady and mortgage rates experiencing a rise, financial institutions continue to navigate competitive pressures and customer demands. As business loan and deposit rates adjust, stakeholders should remain attentive to these trends, which may influence broader economic decisions and investor sentiment.