Bigbank: Loan Rates Became Even Cheaper and the Home Loan Market Continued Strong in October

The home loan market ended October at the same level as the record-breaking September, and compared to October of last year, both the number of loan applications and loan amounts have doubled, according to Bigbank's loan portfolio analysis.

Jonna Pechter, Estonia's head of Bigbank, is convinced that the surge in activity over the past few months is driven by the continuously declining Euribor. "In October, the cost of loan money was the cheapest in the past couple of years. Euribor keeps falling and banks haven't raised their loan margins, which means that right now there's actually a surprisingly favorable window for home purchases, which many are trying to take advantage of," Pechter comments and adds that the combined effect of all these favorable factors has clearly improved the borrowing opportunities for many families seeking to purchase a new home.

The average loan amount in October was 138,368 euros, which according to Bigbank's head is at the same level as a month earlier. "However, it does seem that compared to last winter, when the average loan amount hovered around one hundred thousand euros for months on end, this autumn loans are being taken for noticeably larger amounts," Jonna Pechter highlights another change.

Compared to last year, there has been significant progress in all key indicators: both the number of applications and contracts have grown, as well as the average loan contract amount and the total amount of loans issued. "Since the average real estate price has remained stable for a long time, the cheapening loan money has finally created a good window for those who have postponed home purchases over the past couple of years," explains Jonna Pechter, who believes that in light of rising input prices and the increase in VAT next summer, it is likely that real estate prices will gradually move slightly higher over the course of the year.