Banks offer mixed bag of interest rates

Home loans offered to Greek households by local banks are among the cheapest in the eurozone but businesses are having to dig deep for their financial needs, according to data made public yesterday. Greek banks have been accused by opposition parties and business groups of unfairly increasing interest rates due to the credit crunch in a move that is putting the brakes on investment in a slowing economy. Figures provided by the Hellenic Bank Association, which represents 27 lenders operating in Greece, showed that new mortgages with a fixed or variable interest rate for one year were priced at 5.46 percent versus the eurozone average of 5.80. France and Luxembourg were the other two countries to offer the same loan at a cheaper rate – 5.35 and 5.17 percent respectively. However, on the commercial credit front, interest rates were looking less favorable. Business loans of up to 1 million euros had an average interest rate of 7.24 percent in Greece, the third most expensive in the eurozone after Cyprus and Portugal. The Hellenic Bank Association admitted that interest rates have been going up in Greece due to the credit crunch, but added that this was the case across the entire eurozone.