OREANDA-NEWS. April 23, 2013. As the majority of home loans in the Baltic States have been paid out in euros and with floating interest rates, the borrowers directly benefit from a Euribor decrease; although in 2013 loan costs will not decrease significantly, as the Baltic Household Outlook, compiled by SEB, shows.

The six-month Euribor rate dropped in 2012 from 1.67 per cent to 0.32 per cent. If in January 2012 the average home loan interest rate in the Baltic States was the lowest in Estonia - 3.42 per cent, then in January 2013 it was the lowest in Lithuania - 2.5 per cent. The decrease in the home loan interest rate was the least noticeable in Latvia - only 0.7 per cent during 2012.

In Lithuania, the average interest rate dropped in 2012 by as much as 1.2 per cent. It is presumed that the Euribor will remain on a low level for all of 2013, although a further decline is not likely.

“In the beginning of 2013, there continues to be room for a decline in home loan interest rates because the low level of market interest rates has not yet influenced all (also those with interests fixed for longer than 6 months) loan contracts, although the changes are marginal when compared to 2012. Baltic families can no longer hope that loan costs will continue to decrease as the Euribor drops, as was customary in 2012,” said Triin Messimas, Development Manager of Private Loans at SEB Estonia.

The Baltic Household Outlook is available for review at: www.seb.ee/BHO_aprill_2013