Evolution of mortgage credit in October 2020
26 November 2020 - 4 min Reading time
The number of credit applications in October 2020 decreased by nearly 26% compared to October 2019. The corresponding total amount of these applications was also nearly 17% lower.
In October 2020, the number of granted loans decreased by about 5%. However, in terms of the loan amount, slightly more than 6% was granted than in October 2019.
These findings are based on the figures from the Mortgage Credit Barometer of the Professional Association of Credit (BVK).
In order to track the evolution of mortgage credit more quickly, the Professional Association of Credit (BVK) has been compiling a mortgage credit barometer since early 2009. This barometer provides a monthly overview of the evolution of the number and volume of newly granted and requested mortgage loans for the past month, compared to the same month of the previous year. The percentages mentioned relate to almost the entirety of the BVK mortgage credit market. The underlying absolute figures are released on a quarterly basis through a press release by Febelfin.
Credit Applications
The following graph illustrates the evolution of credit applications, in terms of both the amount and the number, for the past twelve months. The monthly figures are compared to those of the same month in the previous year.
In October 2020, the number of applications for a mortgage loan decreased by almost 26% compared to October 2019. In terms of the amount, there was also a decrease of nearly 17% compared to the previous year. The beginning of the second lockdown is likely a contributing factor to this decline.
The decrease in the number of credit applications occurred across almost all categories: loans for the purchase of a home (-27%), for the construction of a home (-47%), and for home renovations (-28%). Even the number of applications for external refinancing (-12%) saw a decline. Only the number of loans for purchase with renovation (+18%) experienced an increase.
Granted Mortgage Loans
The following graph presents the evolution of granted mortgage loans, in terms of both the number and the amount, for the past twelve months. The monthly figures are compared to those of the same month in the previous year.
In October 2020, the number of granted .mortgage loan agreements as approximately 5% lower than in October 2019. However, the corresponding loan amount increased by slightly more than 6%
When assessing the decrease in the number of granted loans compared to the same month of the previous year, it should not be forgotten that lending had increased exceptionally strongly from October 2019 to the end of 2019 due to the abolition of the housing bonus in Flanders.
The decrease in the number of granted loans occurred in almost all categories: loans for home purchases (-5%), for home construction (-11%), and for home renovations (-14%). Only the number of loans for purchase with renovation (+28%) and external refinancing (+7%) experienced an increase.
