Cypriot savers earn less than eurozone average as mortgage rates stay low
Deposits in Cyprus paid 1.62% against 2.33% across the euro area in September, while new housing loans cost 3.24% versus 3.64%, Central Bank of Cyprus data show.
Deposits held by households in Cyprus earned an average of 1.62 per cent for terms of up to a year in September, against 2.33 per cent across the euro area, according to figures released by the Central Bank of Cyprus. Companies fared worse still by comparison, with new corporate term deposits averaging 1.70 per cent locally and 2.46 per cent in the wider currency bloc.
On the borrowing side the picture reverses: new housing loans in Cyprus carried an average of 3.24 per cent, below the euro-area figure of 3.64 per cent. The CBC's breakdown of individual institutions puts Alpha Bank Cyprus at the bottom of the mortgage table with 2.80 per cent, while the Housing Finance Corporation was dearest at 3.55 per cent.
Small business loans of up to €1 million averaged 4.67 per cent, ranging from 4.28 per cent at Alpha Bank Cyprus to 7.90 per cent at the Cyprus Development Bank. For facilities above €1 million the average slipped to 4.15 per cent. The data cover new business written in September, not the stock of existing deposits and loans.
What it means for residents
Anyone keeping savings in a Cypriot current account is losing ground against inflation and against what the same money would earn elsewhere in the eurozone. On the other side of the ledger, mortgage hunters have room to negotiate, since the spread between the cheapest and dearest lender is close to a full percentage point.
- Check your deposit rate. The gap between the best and worst one-year offers is roughly 0.9 points, so ask your bank for its current term-deposit rate before rolling anything over.
- Compare before you sign a mortgage. Quotes for new housing loans vary from 2.80 to 3.55 per cent; a few calls to rival lenders can change the monthly payment.
- Small firms take note. Borrowing under €1 million is far pricier than larger facilities, so pricing differs sharply between banks at that end of the market.
This text is written from the source article and is not a translation of it.
