Competition on the market for housing loans was reflected in interest rates in April 2017, as the average interest rate on new housing-loan drawdowns declined by 0.04 percentage point on the previous month, to 1.09%. The average interest rate has already been falling almost uninterruptedly for three years. In April, drawdowns of housing loans amounted to EUR 1.4 bn, which is slightly less than in previous years. The low amount of drawdowns is due, in part, to the small number of working days in April.
The concentration of the Finnish banking sector is also visible in housing loans. In April 2017, housing loans were granted by 235 credit institutions, i.e. 86% of all credit institutions operating in Finland. However, slightly more than half of new housing loans were drawn down at only five credit institutions that had granted most housing loans.
Average interest rates on new housing loans granted by the largest lenders are lower than those applied by other credit institutions, but during the year, interest rates have fallen rather uniformly among all credit institutions. The most popular housing loans tied to the 12-month Euribor were available in April 2017 at a 0.15 percentage point lower interest rate, on average, than a year earlier. As the reference rate is negative, this mainly stems from a narrowing of loan margins.1
Loans
The imputed margin on new housing-loan drawdowns was 1,05%. At the end of April 2017, the stock of euro-denominated housing loans was EUR 94.5 bn, and the annual growth rate of the stock was 2.2%. Household credit at end-April comprised EUR 14.7 bn in consumer credit and EUR 16.4 bn in other loans.
New drawdowns of loans to non-financial corporations (excl. overdrafts and credit card credit) amounted to EUR 1.6 bn in April. The average interest rate on new corporate-loan drawdowns rose from March, to 1.84%. At the end of April, the stock of euro-denominated loans to non-financial corporations was EUR 78.0 bn, of which loans to housing corporations accounted for EUR 26.7 bn.
Deposits
At end-April, the stock of household deposits totalled EUR 86.8 bn, and the average interest rate on the deposits was 0.16%. Overnight deposits accounted for EUR 64.6 bn and deposits with agreed maturity for EUR 7.5 bn of the total deposit stock. In April, households concluded EUR 0.3 bn of new agreements on deposits with agreed maturity, at an average interest rate of 0.46%.
1In new housing loan agreements, the minimum reference rate is usually set at zero.
Key figures of Finnish MFIs' loans and deposits, preliminary data
| February, EUR million | March, EUR million | April, EUR million | April, 12-month change1, % | Average interest rate, % | |
| Loans to households2, stock | 125,014 | 125,383 | 125,677 | 2,6 | 1,54 |
| - of which housing loans | 94,075 | 94,279 | 94,484 | 2,2 | 1,05 |
| Loans to non-financial corporations2, stock | 76,584 | 77,548 | 78,039 | 6,9 | 1,43 |
| Deposits by households2, stock | 84,432 | 85,317 | 86,823 | 3,7 | 0,16 |
| Households' new drawdowns of housing loans | 1,325 | 1,599 | 1,387 | 1,09 |
1 Rate of change has been calculated from monthly differences in levels adjusted for classification and other revaluation changes.
2 Households also include non-profit institutions serving households; non-financial corporations also include housing corporations
- Euro-denominated deposits and loans of euro area residents: stock, 12 month rate of change and average interest rate
- Euro-denominated loans and deposits of Finnish households
- New business on loans and new drawdowns of household loans
- Finnish contribution to the euro area monetary aggregates and their main counterparts
For further information, please contact:
Olli Tuomikoski, tel. +358 9 183 2146, email: olli.tuomikoski(at)bof.fi,
Markus Aaltonen, tel. +358 9 183 2395, email: markus.aaltonen(at)bof.fi.
The next news release will be published at 1 pm on 30 June 2017.
Related statistical data and graphs are also available on the Bank of Finland website: https://www.suomenpankki.fi/en/Statistics/mfi-balance-sheet/