Record housing loans disbursed in December

Households drew down new housing loans worth EUR 1.9 billion in December 2020, which is EUR 460 million higher than that in the same period of 2019, according to the Bank of Finland.

Drawdown of housing loans has never been this high in December. The average interest rate on new draw-downs hit a new record low, standing at 0.69% in December 2020.

The exceptional situation on the housing loan market in late 2020 pushed up drawdown figures for the year as a whole.

In September-December 2020, new housing loan draw-downs grew by 13.2% on the same period a year earlier. For the year as a whole, the rise was 4.5% and the total amount taken out was EUR 20.4 billion.

A normal amount of housing loans was renegotiated in December 2020, following a peak in the spring. Renegotiated housing loans totalled EUR 980 million, less than one-fifth of the amount renegotiated in April. The normal amount has varied around EUR one billion for several years.

Housing loan maturities have lengthened further. In December 2020, the average repayment period of new housing loans was 21 years 6 months.

The share of loans with longer repayment periods (over 29 years) has increased rapidly. In December 2020, they accounted for 12.1% of new housing loans, compared with 6.7% in December 2019.

The high level of draw-downs, interest-only periods granted in the spring and longer loan maturities contributed to boosting growth in the stock of housing loans. In December 2020, the annual growth rate of the stock (EUR 106.3 billion) was 3.3%.

At the end of December 2020, household credit comprised EUR 16.8 billion in consumer credit and EUR 18.2 billion in other loans.

Draw-downs of new loans to non-financial corporations (excluding overdrafts and credit card credit) totalled EUR 2.5 billion.

The average interest rate on these declined from November by 1.93% to December.

At the end of December, the stock of euro-denominated corporate loans totalled EUR 96.9 billion, of which loans to housing corporations accounted for EUR 37.3 billion.

The stock of Finnish households’ deposits at end-December 2020 totalled EUR 103.2 billion and the average interest rate on the deposits was 0.05%.