New Loans Decline, Housing Credit Continues to Rise

Net new loans in Cyprus decreased by €18.5 million in October 2025, reaching a total of €429.4 million. This decline primarily reflects a slowdown in corporate borrowing, as companies became more cautious amid rising interest rates and global economic uncertainty. Both small business loans (below €1 million) and large corporate loans saw reductions, suggesting a temporary hesitation among firms to expand or invest in new projects.

Conversely, housing credit continued to grow strongly. Net new housing loans reached €117.5 million, highlighting the ongoing demand for residential property. Many households remain motivated to borrow due to relatively low mortgage rates compared to historic highs, and the steady recovery of the real estate market continues to attract buyers. Consumer lending also rose modestly, with net new consumer loans reaching €23.7 million, reflecting continued household confidence in personal spending.

Interest rates on new loans have been climbing. Consumer loan rates increased to 6.88% from 6.46%, while mortgage rates rose to 3.73% from 3.63%. This rate adjustment reflects tighter monetary policy measures and the Central Bank of Cyprus’s efforts to contain inflation. Overall, the data indicate a mixed credit market: households are increasingly active, particularly in the housing sector, while businesses remain cautious. The trend suggests that the economy is balancing growth with financial prudence, which could stabilize lending conditions in the near future.