Overview Of Net New Loans Decline
Data from the Central Bank of Cyprus show that net new loans declined in January 2026 compared with December. Net new lending fell by €377.7 million, reaching €247.3 million compared with €625.0 million in the previous month. Total new loans also declined, dropping from €986.9 million in December to €495.9 million in January.
Shifting Trends In Loan Categories
Consumer lending recorded a small increase during the month. Net new consumer loans rose from €17.2 million to €18.9 million. Mortgage lending declined to €95.7 million from €135.4 million in December. Business lending also decreased. Loans below €1 million fell from €60.3 million to €40.1 million, while loans above €1 million declined from €406.4 million to €88.1 million.
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Interest Rate Adjustments Across Loan Sectors
Interest rates for several loan categories recorded small changes. Consumer loan rates declined slightly from 7.22% to 7.20%. Mortgage loan rates also decreased, falling from 3.78% to 3.70%. Rates on business loans remained at 4.32% for loans up to €1 million. For loans above €1 million, the rate declined from 4.42% to 4.34%.
Deposit Rates And European Context
Deposit rates for household accounts with a maturity of up to one year remained at 1.20%. Business deposit rates increased from 1.27% to 1.34%. The Central Bank of Cyprus said lending rates in Cyprus are now close to the eurozone median, with household loan margins near zero and corporate margins around 0.4%. Deposit rates in Cyprus remain among the lowest in the eurozone, which the central bank links to high liquidity levels in the banking sector.
Changing Patterns In Mortgage Loan Terms
Data from the central bank also show changes in mortgage loan structures. The share of new housing loans with variable interest rates declined to 11.6%. At the beginning of 2022, nearly all new housing loans were issued with variable rates. Borrowers are increasingly choosing loans with fixed interest rates during the initial years of the contract.
