Bigbank: Home Loans Made a New Jump in April, Volumes More Than Doubled

In April, more than twice as many home loan agreements were concluded and in a total amount 2.5 times larger than a year ago at the same time, according to Bigbank's loan portfolio analysis.

According to Jonna Pechter, head of Bigbank Estonia, the average loan amount also grew 16% compared to March, which was 127,700 euros in April. "Our forecast that the newly effective regulation of the Estonian Bank president on calculating the ratio limit between loan payments and income could contribute to an increase in average loan amounts came true already in April," said Pechter, pointing out that, for example, a person with a net income of 1,700 euros can now take a loan of up to 141,000 euros instead of the previous 120,000 euros.

According to Bigbank's head, home loan application numbers have been clearly higher since the beginning of the year. "A higher loan limit provides the opportunity to improve one's quality of life when buying a new home, and families who have been waiting for a suitable moment for a year and a half have begun to act," commented Pechter, who believes that the major quiet period is now over, the market has reached a new level and will remain more active compared to last year.

It should be kept in mind that a significant portion of new agreements is also refinancing of previously concluded contracts. "Bigbank lowered the bank margin in January, which brought the first wave of activity to the market. Competition has clearly livened up and by now even larger banks have made lending terms more favorable for people," described Pechter the developments in the market and emphasized that a home loan borrower should definitely contact as many banks as they can manage to get the best offer. "A home loan is taken out for years and going with the first offer that comes along often means additional monthly costs," encourages Pechter to shop around in the market.