ECONOMY

Interest rates on loans, deposits drop

The cost of paying credit on home loans continued to decline in July, according to Bank of Greece data published yesterday, as investors with cash parked in savings deposits saw their returns trimmed in the the same month. The interest rate on mortgages with variable or fixed interest rates of up to one year fell by 19 basis points from June to 3.27 percent in July. It stood at 4.92 percent at the end of last year. Interest rates on a number of loans have been steadily decreasing since the start of the year as the European Central Bank (ECB) pumps cheaper funding into the 16-member eurozone. Despite the offer of cheaper money, consumers have been reluctant to sign up for new debt due to the prevailing economic uncertainty, resulting in a slowdown in Greece’s credit expansion, which decelerated in July to an annual pace of 6.6 percent, from 7.4 percent in June. The central bank also said yesterday that interest rates offered on new household savings accounts for up to one year retreated to 2.34 percent in July, from 2.55 percent in June. The reduction in the interest rate on existing savings deposits for up to two years fell to 2.05 percent, from 2.30 percent in June, the central bank added. Figures also showed that interest rates that moved higher in July regarded certain business and consumer loans.