Statistics 30 October 2015 1:00 PM

Housing loan repayment periods longer and loan margins narrower

Over the recent years, the average housing loan repayment periods have lengthened slightly in Finland. In 2013, the average repayment period for new housing-loan drawdowns in Finland was 17 years, 11 months, compared to 18 years, 2 months in 2014. In 2015, the average repayment period lengthened further, to about 18 years, 7 months. Finnish banks have traditionally not granted interest-only housing loans, and the longest repayment periods are approximately 25–30 years.  

The average interest rates on new housing-loan drawdowns have declined in 2015 due to falling market rates and narrowing loan margins alike. In September 2015, the average interest rate on new housing-loan drawdowns was record low, at 1.43%. The average housing loan margin has narrowed in 2015 by about 0.15 percentage point, and the imputed housing loan margin was 1.29% in September 2015.
The low level of interest rates and narrower housing loan margins have slightly boosted new housing-loan drawdowns: in January–September 2015, new drawdowns of housing loans were almost EUR 1 bn up on the year-earlier period.

Loans

In September 2015, households’ new drawdowns of housing loans amounted to EUR 1.4 bn, which is slightly more than a year earlier in September. The stock of euro-denominated housing loans totalled EUR 91.4 bn at the end of September, and the annual growth rate of the housing-loan stock was 2.2%. At the end of September, household credit comprised EUR 14.0 bn in consumer credit and EUR 15.9 bn in other loans.

New drawdowns of loans to non-financial corporations (excl. overdrafts and credit card credit) amounted in September to EUR 2.4 bn. The average interest rate on new corporate-loan drawdowns declined from August, to 1.92%. The stock of euro-denominated loans to non-financial corporations at the end of September was EUR 71.6 bn, of which loans to housing corporations accounted for EUR 22.8 bn.

Deposits

At the end of September, the stock of household deposits totalled EUR 81.0 bn, and the average interest rate on the deposits was 0.32%. Overnight deposits accounted for EUR 55.3 bn and deposits with agreed maturity for EUR 11.2 bn of the total deposit stock. In September, households concluded EUR 0.9 bn of new agreements on deposits with agreed maturity. The average interest rate on these declined from August, to 0.95% in September.

Notes: 
MFIs comprise all monetary financial institutions operating in Finland. 
Loans and deposits comprise all euro-denominated loans and deposits vis-à-vis the euro area as a whole, with countries other than Finland accounting for a very small share of total volumes.

Key figures of Finnish MFIs' loans and deposits, preliminary data

  July, EUR million August, EUR million September, EUR million September, 12-month change1, % Average interest rate, %
Loans to households2, stock 120,684 120,968 121,295 2,4 1,77
    - of which housing loans 90,934 91,123 91,363 2,2 1,28
Loans to non-financial corporations2, stock  71,116 71,487 71,590 6,5 1,68
Deposits by households2, stock 81,771 81,206 80,984 0,1 0,32
Households' new drawdowns of housing loans 1,333 1,272 1,417 1,43

1 Rate of change has been calculated from monthly differences in levels adjusted for classification and other revaluation changes. 
2 Households also include non-profit institutions serving households; non-financial corporations also include housing corporations.

For further information, please contact
Johanna Honkanen, tel. +358 10 831 2992, email: johanna.honkanen@bof.fi.

The next news release will be published at 1 pm on 30 November 2015.

Related statistical data and graphs are also available on the Bank of Finland website: http://www.suomenpankki.fi/link/2331b6266da3492f832ec75e0f654bd9.aspx?epslanguage=en.

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