Statistics 31 May 2022 10:00 AM

New drawdowns of investment property loans decreased more than those of owner-occupied housing loans

In April 2022, households’ drawdowns of new loans for investment purposes (buy-to-let mortgages) totalled EUR 128 mio, a decline of 26% from April last year. These drawdowns also declined in March, by one quarter from March a year earlier. Drawdowns of owner-occupied residential mortgages totalled EUR 1.6 bn in April, down 10% from April 2021.

The interest rates on new housing loans rose further in April 2022; the interest on investment property loans to 1.07% and the interest on owner-occupied residential mortgages to 0.92%. In April, the most common reference rate for housing loans – the 12-month Euribor – turned positive for the first time in many years. It was used in April in 90% of new investment property loans and in 87% of new owner-occupied housing loans.

As a result of the lower amount of drawdowns, the annual growth rate of the stock of household’s investment property loans (EUR 8.8 bn) moderated by 0.5 percentage point from March, to 7.3% in April 2022. The growth rate was still considerably faster than that of the stock of owner-occupied housing loans. The growth rate (3.1%) of the stock of owner-occupied housing loans (EUR 98.7 bn) also moderated in April, but not to the same extent.

Investment property loans are typically smaller and have a longer repayment period than owner-occupied residential mortgages. In April, the average maturity of investment property loans was 18 years 6 months, as compared to 21 years 10 months for owner-occupied housing loans. In April, loans with long repayment periods, i.e. maturities of over 30 years, accounted for a record high share (12%) of new housing loans. Almost all of these loans were owner-occupied residential mortgages.

Loans

At the end of April 2022, out of all loans to Finnish households, consumer credit accounted for EUR 16.8 bn and other loans for EUR 18.2 bn.

Drawdowns of new loans[1] by Finnish non-financial corporations in April 2022 totalled EUR 2.0 bn, of which EUR 410 million were loans to housing corporations. The average interest rate on new corporate loan drawdowns rose from March, to 1.8%. At the end of April, the stock of loans to Finnish non-financial corporations stood at EUR 100.5 bn, of which loans to housing corporations accounted for EUR 40.4 bn.

Deposits

At the end of April 2022, the stock of Finnish households’ deposits stood at EUR 112.4 bn, and the average interest rate on the deposits was 0.03%. Overnight deposits accounted for EUR 103.4 bn and deposits with agreed maturity for EUR 2.1 bn of the deposit stock. In April, households concluded EUR 40 million of new agreements on deposits with agreed maturity, at an average interest rate of 0.36%.

Loans and deposits to Finland, preliminary data
	February, EUR million	March, EUR million	April, EUR million	April, 12-month change1, %	Average interest rate, %
Loans to households, stock	142,098	142,308	142,475	3,5	1,32
- of which housing loans	107,134	107,279	107,451	3,4	0,81
- of which buy-to-let mortgages	8,732	8,762	8,782		0,93
Loans to non-financial corporations², stock	99,417	100,000	100,546	4,3	1,22
Deposits by households, stock	110,238	110,603	112,421	5,8	0,03

Households' new drawdowns of housing loans	1,668	1,909	1,698		0,93
- of which buy-to-let mortgages	166	156	128		1,07

* Includes loans and deposits in all currencies to residents in Finland. The statistical releases of the Bank of Finland up to January 2021, as well as those of the ECB, present loans and deposits in euro to euro area residents and also include non-profit institutions serving households. For these reasons, the figures in this table differ from those in the aforementioned releases.
1 Rate of change has been calculated from monthly differences in levels adjusted for classification and other revaluation changes.
2 Non-financial corporations also include housing corporations.