Bigbank: In February, more than twice as many home loans were taken out compared to a year ago

In February, home loan contracts were concluded two and a half times more frequently and in a total volume approximately three times larger than in the same period a year ago, according to Bigbank's home loan portfolio analysis. The average loan amount was 113,200 euros, which is 17% higher compared to a year earlier.

According to Bigbank Estonia's head Jonna Pechter, the market has become significantly more active primarily because banks have made loan rates more favorable. "It seems that many people have patiently waited for the general lending environment to become more favorable. Lowering bank margins has increased interest despite the fact that Euribor remains at the same level," confirmed Pechter, who noted that the change was already clearly noticeable in January, when Bigbank offered home loans with a 1.65% margin.

Compared to the previous month of January, growth also occurred in the home loan market: contracts were concluded 16% more frequently and the average loan amount increased by 5.5%. "Over the past couple of years, it has often happened that better offers come from smaller banks, which at some point are matched by the major banks that dominate the market. This trend has been the same for both loans and deposits," described Bigbank's head the pattern prevalent in Estonian retail banking, and emphasized that healthy and beneficial competition for borrowers can be driven primarily by the borrowers themselves, if they obtain offers from many different banks.

Jonna Pechter believes that the activity in the home loan market is also aided by the fact that a good interest rate offer applies without restrictions. "It doesn't matter who takes out a loan and for exactly what type of home – the money being lent is always exactly the same for everyone. Therefore, the home loan interest rate should also be equally good for everyone," Pechter is convinced, and gives as an example new developments marked with A-energy class. "Of course, many would want their home to be modern and efficient, but the reality is still that for many Estonian people, buying such a home is still beyond their means today. However, I don't think those people should feel any worse or pay a higher price for a loan when buying a new home," explained Bigbank's head.