Cyprus mortgage interest rates decline in July 2026

Data released by the Central Bank of Cyprus for July 2026 indicates a gradual reduction in borrowing costs for households. The average interest rate for housing loans decreased to 3.78% in July, down from 4.04% in June, reflecting a 0.26 percentage point monthly decline. Notably, interest rates for new mortgage loans were recorded at 3.2%, which is 0.2 percentage points below the Eurozone median.

This shift follows the transition from the European Central Bank's period of aggressive interest rate hikes to a phase of monetary easing. While mortgage transmission is aligned with broader European trends, the data highlights that deposit interest rate adjustments remain significantly slower in Cyprus, despite local banks maintaining high liquidity. For non-financial corporations, current interest rates in Cyprus are roughly 0.3% higher than the Eurozone median, indicating that monetary policy transmission varies across different sectors of the economy.