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If you’re saving your money in a Cypriot bank, you’re probably earning less interest than the average European. But if you’re borrowing for a home or your small business, you’re likely paying more. That’s the uncomfortable picture painted by the Central Bank of Cyprus’s latest report, which shows a widening gap between what people in Cyprus earn on their deposits and what they pay to borrow, compared to the eurozone.
And for everyday people and local businesses, it’s a double whammy: less return on your savings and higher monthly repayments.
Deposits: The bad news for savers
Let’s start with the money sitting in your bank account. In June, the average interest rate on a one-year time deposit for households in Cyprus dropped to 1.13%, while the eurozone average was 1.77%. That may not sound like a big difference until you multiply it across your savings over time.
Some banks are even offering below 1%, with Societe Generale Bank Cyprus paying out just 0.62%, a far cry from Eurobank Cyprus, which leads the pack at 1.50%.
The situation isn’t much better for businesses. Corporate deposit rates have also dropped, with an average of 1.18%, compared to 1.93% in the eurozone.
Mortgages: The uphill climb for homebuyers
Thinking about buying a home? Brace yourself. The average interest rate on new housing loans climbed to 3.97% in June. In the eurozone, it dropped to 3.61%.
In Cyprus, Bank of Cyprus topped the chart as the most expensive option at 5.00%. On the other hand, Astrobank offered a more competitive 2.21% after slashing its rate. Still, most major banks remained well above the eurozone average.
So while homeowners in other EU countries are seeing some relief in borrowing costs, Cypriots are paying more just to own a home.
Business loans: It depends on your bank
For small businesses borrowing under €1 million, the average loan interest rate in Cyprus fell slightly to 4.56%, but that’s still nearly a full percentage point higher than the eurozone average of 3.73%.
Banks like Banque SBA and Astrobank are charging over 5.9%, while Alpha Bank Cyprus and Hellenic Bank are offering more competitive rates below 4.2%.
For larger business loans over €1 million, the pattern’s the same: Cyprus borrowers pay more than their European peers.
What it all means
For Cypriots, this growing gap means that money works harder against you than for you. Savings don’t grow as quickly, and borrowing for major life decisions, like buying a home or starting a business, costs more. That can have ripple effects across the economy, from consumer confidence to entrepreneurial risk-taking.
The report also shows huge differences between local banks, meaning it pays, literally, to shop around. A few decimal points in interest rates can translate into thousands of euros over time.
Bottom line?
Whether you're saving for your future or borrowing to build it, the numbers say it loud and clear: Cyprus is out of step with Europe, and not in a good way.
