Credit activity in Cyprus slowed significantly in July 2026, with net new loans falling to €415 million, compared with €626.2 million in June, a decrease of around 33.7%.
The total value of new loan agreements, including renegotiated loans, also declined to €686.1 million from €831.3 million in the previous month.
At the same time, the cost of borrowing for home purchases fell, while interest rates on consumer and business loans increased. Deposit rates for households and companies moved in different directions.
Mortgages become cheaper
The interest rate on new housing loans fell to 3.78% in July, from 4.04% in June.
The change in the weighted average interest rate does not necessarily reflect only banks’ pricing decisions. The portfolio includes different types of housing loans, such as first-home and holiday-home loans, which carry different levels of risk and interest rates.
As a result, monthly changes in the composition of the portfolio can affect the overall average interest rate.
By contrast, the interest rate on consumer loans rose to 6.94%, from 6.50% in June.
Business borrowing also became more expensive. For loans of up to €1 million, the interest rate increased to 4.47%, from 4.32%, while for loans above €1 million it rose to 4.29%, from 4.07%.
Deposit rates move differently
For fixed-term deposits of up to one year, the interest rate for households fell to 1.27%, compared with 1.42% in June.
The corresponding rate for non-financial corporations, however, increased to 1.56%, from 1.41%.
New lending by category
Net new consumer loans fell to €23.9 million, from €25.1 million in June. The total value of new consumer loan agreements stood at €26.5 million, compared with €29.6 million.
Net new housing loans declined to €149.5 million, from €152.1 million in June. However, the total value of new housing loan agreements increased to €205.8 million, from €201.1 million.
For business loans of up to €1 million, net new lending fell to €52.3 million, compared with €54.5 million. The total value of new agreements in this category dropped to €70.4 million, from €77.3 million.
The largest change was recorded in business loans above €1 million, where net new lending fell to €162.3 million, from €387.5 million in June.
The total value of new agreements in this category also declined to €354.6 million, compared with €512.5 million the previous month.
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