Statistics 29 July 2024 10:00 AM

Drawdowns of holiday cottage loans continued in the first half of 2024 at last year’s pace

In June, the volume of housing loans drawn down for the purchase of holiday homes, i.e., holiday cottage loans, remained low at 11% less than a year earlier. However, the volume of holiday cottage loans drawn down in January–June was almost the same as in the corresponding period last year. Following the rise in interest rates, shorter reference rates have gained popularity also in holiday cottage loans.

In June 2024, Finnish households drew down new housing loans for the purchase of holiday homes (holiday cottage loans) in the value of EUR 78 million, which is 11% less than a year earlier in June. However, the amount drawn down in January–June 2024 was almost the same as in the comparable period in 2023. The demand for holiday cottage loans usually peaks in May–September, and June is typically the month with the largest drawdowns. During the pandemic in 2020 and 2021, an unusually high volume of holiday cottage loans was drawn down.

The average interest rate on new drawdowns of holiday cottage loans declined slightly from May, to stand at 4.49% in June. Similarly to housing loans, the majority of holiday cottage loans is linked to Euribor rates. In June 2024, 95% of new drawdowns of holiday cottage loans were linked to Euribor rates.

The most common reference rate, also for holiday cottage loans, is the 12-month Euribor. However, following the rise in interest rates, shorter Euribor rates are now being used increasingly as a reference rate for holiday cottage loans, similarly to housing loans. In June 2024, 62% of new Euribor-linked holiday cottage loans were linked to the 1-year Euribor, 8% to the 6-month Euribor and 29% to the 3-month Euribor. During the times of the lowest interest rates in recent years, the 1-year Euribor has typically accounted for 80–90% of the reference rates of holiday cottage loans.

Due to the reduced drawdown volumes, the year-on-year contraction of the stock of holiday cottage loans has continued already for over a year. In June 2024, the stock of households’ holiday cottage loans contracted by 2.5% in year-on-year terms, as opposed to 1.4% last year’s June. At the end of June 2024, the stock of holiday cottage loans stood at EUR 4.4 billion. The average interest on the stock of holiday cottage loans decreased slightly from May to stand at 4.34% in June. 95% of the stock of holiday cottage loans was linked to Euribor rates.

Loans

In June 2024, Finnish households drew down EUR 1.1 billion of new housing loans, which is EUR 220 million less than in the same period a year earlier. Buy-to-let mortgages accounted for EUR 100 million of the new housing loan drawdowns. The average interest rate on new housing loans decreased from May to stand at 4.31% in June. At the end of June 2024, the housing loan stock totalled EUR 106.0 billion, and its year-on-year growth rate was −0.9%. Buy-to-let mortgages accounted for EUR 8.7 billion of the housing loan stock. At the end of June, the household loan stock included EUR 17.9 billion of consumer credit and EUR 17.5 billion of other loans.

Drawdowns of new loans^[1] by Finnish non-financial corporations in June totalled EUR 3.2 billion, including EUR 780 million of loans to housing corporations. The average interest rate on new corporate-loan drawdowns declined from May to 5.24%. At the end of June, the stock of loans granted to Finnish non-financial corporations was EUR 108.1 billion, whereof loans to housing corporations accounted for EUR 44.6 billion.

Deposits

At the end of June 2024, Finnish households’ aggregate deposit stock totalled EUR 110.8 billion, with an average interest rate of 1.34%. Overnight deposits accounted for EUR 68.1 billion and deposits with agreed maturity for EUR 14.0 billion of the total deposit stock. In June, Finnish households made new deposit agreements with an agreed maturity in the amount of EUR 1.2 billion, at an average interest rate of 3.56%.

Loans and deposits to Finland, preliminary data*
	April, EUR million	May, EUR million	June, EUR million	June, 12-month change¹, %	Average interest rate, %
Loans to households, stock	141,341	141,313	141,421	-0.6	4.62
- of which housing loans	106,007	105,965	106,032	-0.9	4.04
- of which buy-to-let mortgages	8,666	8,674	8,682		4.24
Loans to non-financial corporations², stock	107,445	108,077	108,130	1.2	4.69
Deposits by households, stock	108,992	109,104	110,784	-0.1	1.34

Households' new drawdowns of housing loans	1,111	1,134	1,096		4.31
- of which buy-to-let mortgages	113	100	96		4.47

* 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.