ECONOMY

Cost of borrowing heads higher

Rising interest rates are making borrowing an increasingly unattractive proposition for Greek businesses and households.

According to the latest Bank of Greece data, the spread between deposit and lending rates widened to 4.30 percentage points in July, from 3.68 a year earlier.

The average floating rate for consumer loans climbed to 11.03 percent, and even with collateral it stood at 9 percent. When extra charges are taken into account, the final cost rose to 12.82 percent. In mortgage loans, which are traditionally backed by collateral, the average rate was 4.44 percent and with extra charges it rose to 4.99 percent.

In business credit, the cost rose not just for operating loans, but equally for long-term investment, where it hovered between 7 and 9 percent.

For instance, the average rate for a long-term loan of up to 250,000 euros rose to 8.06 percent, and for loans up to 1 million euros to 6.87 percent (from 5.56 percent a year earlier). For loans of over 1 million euros, the average rate stood at 6.58 percent in July.