OREANDA-NEWS. In November 2015, households’ new drawdowns of housing loans amounted to EUR 1.4 bn, which is slightly less than in October but EUR 0.2 bn more than a year earlier in November. Drawdowns of housing loans tend to slow towards the end of the year, but this was not the case in 2015. With the exception of January, new drawdowns of housing loans were each month higher than in 2014. In January–November 2015, new drawdowns of housing loans amounted to EUR 15.2 bn, compared to EUR 13.9 bn in the year-earlier period.

The record low reference rates for housing loans and narrower loan margins have boosted the demand for housing loans. In November 2015, the average interest rate on new housing-loan drawdowns was 1.34% and the average housing loan margin calculated by the Bank of Finland was 1.27%. The loan cap that will take effect in July 2016 will probably increase first-time house buyers' interest in taking out housing loans before the loan cap enters into force.

The stock of housing loans totalled EUR 91.9 bn at the end of November, which is EUR 2.1 bn more than a year earlier. The annual growth rate of the stock was 2.4%. Growth in the loan stock reflects not only new drawdowns but also the use of interest-only periods and forbearance. In such a case, the customer pays only the interest on the loan and so the loan stock is not reduced.

Loans

At the end of November, household credit comprised, in addition to housing loans, EUR 14.1 bn in consumer credit and EUR 15.9 bn in other loans.

New drawdowns of loans to non-financial corporations (excl. overdrafts and credit card credit) amounted to EUR 1.9 bn in November. The average interest rate on new corporate-loan drawdowns increased slightly from October, to 2.0%. The stock of euro-denominated loans to non-financial corporations at the end of November was EUR 72.7 bn, of which loans to housing corporations accounted for EUR 23.1 bn.

Deposits

At the end of November, the stock of household deposits totalled EUR 80.8 bn, and the average interest rate on the deposits was 0.32%. Overnight deposits accounted for EUR 55.4 bn and deposits with agreed maturity for EUR 10.9 bn of the total deposit stock. In November, households concluded EUR 0.8 bn of new agreements on deposits with agreed maturity. The average interest rate on these declined from October, to 0.85% in November.

Notes:
MFIs comprise all monetary financial institutions operating in Finland.
Loans and deposits comprise all euro-denominated loans and deposits vis-?-vis the euro area as a whole, with countries other than Finland accounting for a very small share of total volumes.
 

Key figures of Finnish MFIs' loans and deposits, preliminary data

  September, EUR million October, EUR million October, EUR million November, 12-month change1, % Average interest rate, %
Loans to households2, stock 121,295 121,769 121,905 2,5 1,75
    - of which housing loans 91,363 91,768 91,909 2,4 1,26
Loans to non-financial corporations2, stock  71,590 71,719 72,700 7,3 1,66
Deposits by households2, stock 80,984 81,768 80,778 0,4 0,32
Households' new drawdowns of housing loans 1,417 1,509 1,430   1,34

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.