Bigbank: Average Home Loan Has Risen Sharply Over the Year

The average home loan issued by Bigbank in March was 132,067 euros, which is nearly a third larger compared to the same month last year, when it remained just below the symbolic 100,000 euro threshold.

"The average volume of home loans is keeping pace with real estate prices in Tallinn and its surroundings. Just as the average price per square meter set a record, loan amounts have been continuously growing," commented Bigbank Estonia's head Jonna Pechter on the results, noting that March was Bigbank's most successful month ever in terms of issued home loans. "What adds to the extraordinary nature is that at the beginning of the month, there was clearly a dominant hesitant attitude due to the war that had erupted in Ukraine at the end of February, but in the second half of the month, people's interest was significantly higher than before," described Pechter the recent developments in the lending market.

According to Pechter, the rapid increase in real estate prices has made buying a new home more difficult for many families. "A special-schedule home loan can help overcome the price barrier, and interest in it has grown sharply this year. This way, a home buyer can, for example, pay only interest for the first 10-15 years, and the repayment of the loan principal begins only years later. By that time, inflation and income growth will have already had a positive effect on the family's loan repayment capacity," explained Jonna Pechter, who noted that Bigbank is currently the only one offering such special-schedule home loans on the Estonian market.

According to Pechter, the rapid increase in real estate prices has made buying a new home more difficult for many families. "A special-schedule home loan can help overcome the price barrier, and interest in it has grown sharply this year. This way, a home buyer can, for example, pay only interest for the first 10-15 years, and the repayment of the loan principal begins only years later. By that time, inflation and income growth will have already had a positive effect on the family's loan repayment capacity," explained Jonna Pechter, who noted that Bigbank is currently the only one offering such special-schedule home loans on the Estonian market.

Bigbank is an Estonian commercial bank specializing in loans with international reach, whose balance sheet exceeded one billion euros in 2021.