Mortgage Interest Rates in Egypt: Latest Update

Are you updated with the mortgage interest rates in Egypt?

Mortgage rates in Egypt currently reflect a dynamic interplay between the Central Bank of Egypt’s (CBE) monetary policy and government-backed housing initiatives. Amid a backdrop of turbulent inflation, currency reforms, and IMF-supported fiscal adjustments, both benchmark interest rates and subsidized lending programs are shaping affordability for homebuyers.

Central Bank Key Rates & Monetary Policy

Policy Decisions

On July 10, 2025, the CBE’s Monetary Policy Committee decided to hold its key rates steady:

• Overnight deposit rate at 24%

• Overnight lending rate at 25%

This pause marked a break after a series of rate cuts:

• 225 basis points (bps) in April 2025, lowering the lending rate to 26% and deposit to 25%

• 100 bps in May 2025, bringing deposit to 24% and lending likely to 25%

Inflation & Economic Context

Headline inflation dropped from a September 2023 peak of ~38% to around 14.9% in June 2025. Real GDP growth hovered at 4.8% in Q1 and Q2 2025—up from ~2.4% year-on-year in mid‑2024.

A Reuters poll of analysts suggested no further rate cuts in July, citing inflation rebound (13.6–16.8% between March–May) and global uncertainty.

Trend Summary

• Feb 2025: Interbank overnight rate ~27.54%

• Apr 17, 2025: Key policy move lowered deposit to 25%, lending to 26%

• May 22, 2025: Additional 100 bps cut → deposit 24%, lending 25%

• July 10, 2025: Rates held steady, reflecting stabilization

These changes significantly affect the cost of borrowing for homes and other loans.

How Benchmarks Affect Mortgage Lending

Egypt’s mortgage lenders generally price loans relative to CBE’s base rates—typically tracking the lending rate or interbank rate. As a result:

• High CBE rates (~25–26%) translate into comparably high mortgage yields.

• Conversely, rate cuts are expected to trickle down and lower home financing costs—but with varying lags across lenders.

Government-Backed Mortgage Initiatives

To foster homeownership—especially among low and middle-income Egyptians—the CBE has launched targeted mortgage support schemes in partnership with major banks:

CBE Initiative via CIB

• Descending rate between 3%–8%

• Loan tenor up to 30 years, down-payment 15–20%

• CIB offers subsidized mortgage rates:

  • 3% for incomes ≤ ~EGP 18,000/month, up to EGP 1.1 million property

  • 8% for incomes up to EGP 50,000/month, up to EGP 2.5 million property

Example – EGP 1 million loan over 30 years:

• At 3%, monthly ≈ EGP 3,585

• At 8%, monthly ≈ EGP 6,175

Banque du Caire (BDC)

• Offers 3%, 5%, 7%, and 8% decreasing rates for low/middle-income borrowers on existing residential units

• Loan tenor up to 30 years, down-payment 15–40%

Banque Misr & Bank NXT

• Banque Misr: 3% and 8% mortgage rates under CBE initiatives

• Bank NXT:

  • 3% for up to 85% financing on units up to EGP 1.4M

  • 8% for units up to EGP 2.5M

  • Tenor up to 30 years; no insurance/registration fees

Comparison: Market vs. Subsidized Rates

Takeaway:
Standard mortgages remain prohibitively expensive due to high base rates (~25%), but CBE subsidy programs significantly lower rates, making housing far more affordable, especially for targeted income groups.

Challenges & Outlook

Inflation Volatility

Despite decreases, inflation remains high (~14–15%). Persistent inflation may force the CBE to reverse cuts—keeping borrowing costs high.

Currency & External Pressures

Following a historic 600 bps hike in March 2024 and pound float, Egypt secured IMF loans and new investments (e.g., UAE’s Ras El-Hikma). However, global uncertainties could impact import costs and inflation.

Program Rollbacks or Expansions

It remains to be seen how scalable the subsidized schemes are. If inflation reaccelerates or foreign reserves dip, subsidies may face strain. Alternatively, sustained policy success may yield deeper cuts and expanded eligibility.

What This Means for Borrowers (July 2025)

• Market mortgages: Still costly (~25%)—only feasible for borrowers with high incomes or short-term loans.

• Subsidized programs: Excellent deals at 3%–8%, long tenors, low down-payments—ideal for first-time, middle-income buyers.

• Timing matters: With the CBE pausing cuts for now, borrowers might lock into better rates under current subsidy terms before conditions change.

Future Outlook

• Near-term: Expect stability in base rates—CBE cautious amid inflation and global risks.

• Medium-term: Potential resume of gradual cuts if inflation continues to ease—this would trickle into market mortgage rates.

• Long-term: Continued use of subsidies; credit growth will likely support real estate and construction sectors.

Conclusion

As of July 2025, Egypt’s mortgage landscape is characterized by:

1. High policy rates (~24–25%), limiting standard mortgage affordability.

2. Robust subsidy schemes (3–8%) that offer substantial relief to targeted borrowers.

3. A controlled CBE policy stance seeking to balance inflation containment and economic recovery.

For prospective homeowners, the clear strategy is:

• Tap into CBE-backed offerings (3–8%) before eligibility constraints or inflation dynamics shift.

• Monitor CBE policy in late 2025—further rate cuts could broaden affordable borrowing beyond subsidy programs.

Frequently Asked Questions

What is the current mortgage interest rate environment in Egypt as of July 2025?

As of July 2025, Egypt’s standard (market-based) mortgage interest rates remain high—generally around 25–26%, closely tracking the Central Bank of Egypt’s (CBE) lending rate (25%). However, this only applies to non-subsidized loans. Meanwhile, subsidized mortgage loans, introduced under CBE initiatives, offer much lower interest rates between 3% and 8% depending on the borrower’s income level and property value. These subsidies are part of government efforts to make housing more affordable amid inflation and economic reforms.

How have CBE interest rates changed in 2025 so far?

In 2025, the CBE has taken several notable steps:

• April 2025: Cut policy rates by 225 basis points for the first time since 2020.

• May 2025: Another 100 bps cut followed.

• July 2025: Rates were kept steady, with the deposit rate at 24% and lending rate at 25%.

These decisions reflect a response to cooling inflation, which fell from a peak of ~38% in 2023 to ~14.9% in June 2025.

How does inflation affect mortgage interest rates in Egypt?

High inflation leads the Central Bank to increase interest rates to stabilize the currency and curb price growth. In turn, this causes mortgage rates to rise, making borrowing more expensive. Conversely, when inflation cools, the CBE may lower policy rates, which gradually brings down mortgage costs—though typically with a lag. As inflation in Egypt has declined in 2025, it allowed the CBE to cut rates twice, making credit slightly more affordable and enabling long-term reductions in mortgage costs.

Are standard market mortgage loans affordable for most Egyptians today?

No, standard (non-subsidized) mortgage loans with interest rates around 25–26% are prohibitively expensive for most Egyptians. At those rates, monthly payments on even modest-sized loans are often out of reach, especially with economic pressures like inflation and currency devaluation. Hence, most eligible buyers rely on CBE-subsidized programs, which drastically reduce costs through fixed lower rates.

How does a mortgage at 3% interest compare to one at 8%?

The difference is significant in terms of monthly payment and total loan cost.
Example: For a EGP 1 million loan over 30 years:

• At 3% interest: Monthly payment ≈ EGP 3,585

• At 8% interest: Monthly payment ≈ EGP 6,175

That’s a difference of EGP 2,590/month, or over EGP 930,000 across the loan term. This underscores the value of qualifying for the lower subsidized rates.

Which banks are currently offering subsidized mortgage loans in Egypt?

Multiple banks participate in the CBE-backed initiatives, including:

• CIB Egypt: Offers both 3% and 8% products, with a detailed calculator and simple application process.

• Banque Misr: Provides long-term fixed-rate mortgages under both subsidized categories.

• Banque du Caire: Offers a tiered rate model (3% to 8%) depending on income level.

• Bank NXT: A newer player offering flexible mortgage options with limited upfront fees and extended terms.

Each bank might have slight variations in terms and required documents.

What’s the forecast for mortgage interest rates in Egypt in late 2025?

While it’s impossible to predict with certainty, the outlook for the rest of 2025 suggests rate stability:

• The CBE has paused its rate-cutting cycle after two significant cuts.

• Inflation is declining, but remains elevated (~14–15%), making further cuts risky.

• External risks like global oil prices, geopolitical events, and exchange rate pressure may influence policy.

If inflation continues to drop and GDP stabilizes, we may see another rate cut in late 2025 or early 2026, making mortgages slightly more affordable over time.

What should a prospective homebuyer in Egypt do right now?

Here are strategic tips:

• Apply for CBE-subsidized mortgage programs if eligible—they’re significantly cheaper.

• Lock in current rates, especially at 3% or 8%, before program terms or inflation dynamics change.

• Avoid standard-rate mortgages unless you have a high income and short repayment term.

• Compare offers from multiple banks—some waive fees or offer more flexibility.

• Monitor future CBE meetings (next expected in September 2025) for changes in base rates that could affect borrowing costs.