Renegotiations of housing loan agreements on the increase
In January–March 2018, households renegotiated EUR 3.8 bn worth of housing loan agreements, which is 20% more than in the corresponding period in 2017 and 35% more than in the same period in 2016. Renegotiations of housing loans were last more active during credit institutions' campaigns for interest-only periods in 2015.
Since interest-only campaigns, monthly renegotiations of housing loans have averaged at EUR 1 bn. The volume of renegotiated housing loan agreements includes interest-only renegotiations and also other loan renegotiations, such as e.g. changes in interest rate margins. Therefore, growth in the volume of renegotiated agreements also reflects competition between banks on housing loan customers.
Interest rates on housing loans declined from February. In March 2018, the average interest rate on new housing loan drawdowns was 0.92% and the imputed margin1 was 0.9%. According to the Bank of Finland estimate, costs from interest rate hedges for housing loans currently increase the imputed margin by 0.1–0.2 percentage point. The popularity of Euribor rates as reference rates for housing loans remained high. In March, 98% of new housing loans were linked to Euribor rates and 2% to fixed interest rates.
Loans
In March 2018, households' new drawdowns of housing loans amounted to EUR 1.5 bn. At the end of March, the stock of euro-denominated housing loans amounted to EUR 96.2 bn and the annual growth rate of the stock was 2.1%. Household credit at end-March comprised EUR 15.3 bn in consumer credit and EUR 16.9 bn in other loans.
New drawdowns of loans to non-financial corporations (excl. overdrafts and credit card credit) amounted to EUR 2.1 bn in March. The average interest rate on new corporate-loan drawdowns rose from February, to 2.28%. The stock of euro-denominated loans to non-financial corporations at end-March was EUR 81 bn, of which loans to housing corporations accounted for EUR 29.1 bn.
Deposits
At the end of March, the stock of household deposits2 totalled EUR 84.8 bn, and the average interest rate on the deposits was 0.13%. Overnight deposits accounted for EUR 63.6 bn and deposits with agreed maturity for EUR 6.2 bn of the deposit stock. In March, households concluded EUR 0.6 bn of new agreements on deposits with agreed maturity, at an average interest rate of 0.26%.
1Data on imputed margin has not been deducted by costs from interest rate hedges which affect the annualised agreed rate.
2Contrary to previous news releases, household deposits no longer include data on non-profit institutions serving households.
Key figures of Finnish MFIs' loans and deposits, preliminary data
| January, EUR million | February, EUR million | March, EUR million | March, 12-month change1, % | Average interest rate, % | |
| Loans to households2, stock | 128,021 | 128,101 | 128,425 | 2,6 | 1,50 |
| - of which housing loans | 95,921 | 95,997 | 96,237 | 2,1 | 1,00 |
| Loans to non-financial corporations2, stock | 79,188 | 80,046 | 80,959 | 4,5 | 1,41 |
| Deposits by households2, stock | 87,008 | 87,324 | 88,492 | 3,7 | 0,13 |
| Households' new drawdowns of housing loans | 1,325 | 1,367 | 1,494 | 0,92 |
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
- Euro-denominated deposits and loans of euro area residents: stock, 12 month rate of change and average interest rate
- Euro-denominated loans and deposits of Finnish households
- New business on loans and new drawdowns of household loans
- Finnish contribution to the euro area monetary aggregates and their main counterparts
- Imputed interest rate margins on loans from MFIs
For further information, please contact:
Markus Aaltonen, tel. +358 9 183 2395, email: markus.aaltonen(at)bof.fi
Ville Tolkki, tel. +358 9 183 2420, email: ville.tolkki(at)bof.fi.
Olli Tuomikoski, tel. +358 9 183 2146, email: olli.tuomikoski(at)bof.fi
The next news release will be published at 1 pm on 31 May 2018.
Related statistical data and graphs are also available on the Bank of Finland website: https://www.suomenpankki.fi/en/Statistics/mfi-balance-sheet/.