The average interest rate on housing loans fell

The volume of loans and leases issued to Estonian companies and households was 3.4% larger in November than a year earlier. The portfolio increased during the month by 40 million euros and the total loan liabilities of companies and households at the end of November stood at 15.4 billion euros.

Annual growth in loans to companies was 4.5%, as it had been in the previous month. Corporate loan liabilities increased during November by 27 million euros as the volumes of both long-term and short-term loans issued during the month were above their averages for the year. Growth in long-term loans was also affected by car leases, which grew partly because of a change in the law affecting the taxation of company cars, which came into force in December. The largest volume of new loans issued in November went to companies in trade, industry and real estate.

Annual growth in mortgages accelerated in November to 2.6%. New housing loans worth 71 million euros were taken out, which is comparable to the amount in the preceding months. The volume of other loans issued to households was smaller than it had been in the preceding months.

The average mortgage interest rate fell in November, as it had in October, as the average marginal was lowered. The average interest rate for mortgages issued in November fell to 2.2% and the average interest rate for long-term loans taken by companies was 2.5%.

The share of loans overdue for more than 60 days accounted for 1.9% of the loan portfolio in November. The volume of overdue loans has remained relatively unchanged since the end of last year. Overdue loans are being reduced because earlier loan repayment problems are being solved, but at the same time new problems with repayments of loans are appearing. Long-term overdue loans have increased in the trade sector in recent months, and in November they also increased for industrial companies.

The growth in household savings remained rapid and stood at 8.4% over the year. Corporate deposits, which tend to be more volatile, fell by 94 million euros in November. The total deposits of companies and households stood at 9.6 billion euros at the end of November, which is 6.7% more than a year ago. Non-resident deposits increased slightly in November, but the change in their volume from a year earlier was only very small at 0.8%.

Source: Eesti Pank

Author: Mari Tamm, Financial Sector Policy Division of Eesti Pank

 

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