Bigbank: Home Loan Applications Were More Than Three Times Higher in January

In January, home loan applications were submitted more than three times as many as in December, according to Bigbank's home loan portfolio analysis. The number of concluded loan agreements was at the same level as in December, and the average loan amount was similar to recent months at 107,000 euros.

According to Bigbank's Estonian director Jonna Pechter, the main reason for the threefold increase in loan applications was the 1.65% margin offered by the bank. "However, such a jump shows that home buyers haven't gone anywhere, interest is high and decisions often come down to just the loan interest rate," Pechter explained and added that as long as euribor hasn't been lowered, the only way to stimulate the market is through the banks' hands. "Although large universal banks should find it significantly easier to lower interest rates, they have so far actively held onto every bit of their profit, and so smaller players have to lead the way again," described Bigbank's director the bigger picture in the home loan market.

Pechter considers it very important that any good interest rate offer applies to everyone regardless of the applicant's profession, the energy class of the home being purchased, or its exact location. "For example, a very large portion of hardworking people today cannot afford to buy a home in an A-class energy efficient new development even with great desire, but they shouldn't be punished for that with a higher interest rate," emphasized Pechter, who also doesn't consider it right when some banks tie expensive additional obligations to favorable home loans. "Buying a home should be as simple as possible, because your own home is your own home and loan money is always the same euro in every bank," Jonna Pechter is convinced.

Of the January loan applications, every fourth was a desire to refinance an existing loan, which on one hand confirms people's desire and ability to plan their family finances and on the other hand points to disappointment in their home banks' inflexibility. "Still, it's always worth carefully adding up all the costs associated with switching contracts, because with a small margin change, switching banks may not bring any benefit," Jonna Pechter urged people not to rush into major decisions.