On Friday, the Bank of Cyprus announced an immediate cut in its reference rate for loans linked to the European Central Bank’s (ECB) base interest rate. The reduction will see the rate drop from 4.25% to 3.65%, taking effect from September 18, 2024.
This decision follows the ECB’s recent move to lower interest rates, with the bank highlighting that the 0.60% reduction is expected to provide a significant benefit to customers. According to the Bank of Cyprus, close to 8,000 borrowers with loans tied to the ECB base rate will experience immediate relief in their monthly payments.
In addition to this reduction, the bank has already begun lowering interest rates on approximately 9,600 mortgage loans linked to the Euribor rate in recent months. The Euribor, which had reached a peak of 4.14% in October 2023, has since gradually declined to 3.27%. The bank anticipates that both interest rates will continue to decrease.
The Bank of Cyprus also noted a broader trend: loan interest rates for households in Cyprus fell by 0.71% between January and July 2024, compared to a modest average drop of 0.12% across the European Union during the same timeframe.
The bank stated that the ECB’s interest rate cuts, following the stabilization of inflation, are helping to lower borrowing costs and indirectly support economic growth. Furthermore, the Bank of Cyprus emphasized its commitment to supporting the local economy, businesses, and households by offering competitive loan rates and favorable financing terms.
During prior periods of rising interest rates, the bank had adjusted loan terms to assist thousands of customers in managing increased repayments.
Source: Cyprus Mail