Households are braver, they take loans

  • According to the latest data, the amount of new housing loans increased by 38.5 percent in the first 11 months of last year.
  • The growth of personal loans was 47 percent.
  • According to Banko, the expansion of retail lending has become durable and demand for home loans and personal loans may remain strong this year as well.
  • And the proportion of mortgages with a fixed installment for several years may increase further this year.

 

Households are more indebted to debt, as the recent trend in the retail credit market seems to be persistent:

Both home loans and personal loans are showing significant growth.

Both home loans and personal loans are showing significant growth.

 

The amount of new housing loans reached USD 594 billion in the first 11 months of last year, which is a 38.5 percent increase compared to the same period of the previous year. At the same time, new personal loans increased 47 percent to $ 283.6 billion, according to Banko’s latest official data. According to Erika Trencsán, an expert at Banko , last year’s data showed that the amount of newly disbursed home loans and personal loans has increased significantly month-on-month , so retail lending is on a continuous growth path , and significant demand is expected in 2018 as well. home loans and personal loans.

Significant demand may remain

Significant demand may remain

Several factors continue to support the growth of retail lending. On the one hand, household income increased partly due to the rise in net real wages and, due to the low interest rate environment, housing loans and personal loans became cheaper than usual in previous years.

While the population is taking on more and more credit, it is also visible that predictability is important to them.

The amount of housing loans guaranteeing a fixed installment for more than 10 years exceeded USD 34 billion in the first 11 months of last year, an increase of 44 percent. Although USD 34 billion is a relatively low figure for the entire mortgage market, we expect the share of fixed-term mortgages to continue to increase in 2018. And demand for fixed-term home loans for several years may be boosted by competition between banks , which can make these schemes cheaper, ”said Erika Trencsán . He added that competition between banks is intensifying in the home and personal loans market. That is why it is important that those who are considering borrowing not only take into consideration the offer of their own bank , but also look at as many offers as there can be significant differences.

According to Banko , while retail lending is on a steep rise, there is no over-indebtedness yet. This is due to the fact that there are built-in brakes in the system – primarily the pay-as-you-go rule – which prevents households from borrowing too much.

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