The number of credit applications, excluding refinancing, decreased with 24% in 2023 compared to 2022. A similar decrease was seen in amount. The credit applications for “new construction” saw a sharp decline of more than 44% in number and almost 45% in amount. However, the number of credit applications for “Purchase + renovation” showed a less steep decline compared to 2022, of 9% in number and 14.5% in amount respectively. 

Although is has not been an easy year, still excluding refinancing, more than 180,000 loans were granted for an amount of almost EUR 30 billion. Nevertheless, this represents a 30% drop compared to 2022. 

This is shown by the statistics on mortgage credit that were published today by the Professional Association of Credit (BVK/UPC).

The first half of 2023 was marked by the full impact of the rise in interest rates, which, after 2 record years, led to a decline in borrowing capacity and consequently in demand for mortgage credit.   

This negative trend also persisted in the second half of the year, although less pronounced. Indeed, the second half of the year still saw a decline of, excluding refinancing, 23.3% in amount compared to the same period in 2022. In the first half of the year, there was still a decrease of 36.1% compared to 2022.  

In a market suffering from what is felt to be "high" interest rates and consequently a decline in repayment and borrowing capacity, 93,000 mortgage loans were still granted in the second half of the year, amounting to almost EUR 15.4 billion. 

Interest rates have thus played an important role in the evolution of the past year. According to the figures published by the National Bank of Belgium, the interest rates in November 2023 ranged between 3.56% (for loans with a variable interest rate and an initial period of fixed rate of more than 10 years) and 5.45% (for loans with an initial fixed rate of up to 1 year). 

Regarding the entire year 2023:

A focus on the fourth quarter of 2023 compared to the fourth quarter of 2022 shows the following results.

The number of credit applications, excluding those related to external refinancing, experienced a decrease of about 8% during the fourth quarter of 2023 compared to the same quarter of the previous year. The underlying amount of credit applications fell slightly less, by almost 8%, during the last quarter of 2023.

Credit applications for the purchase of a home (-3,442) fell by -7.8%, those for the renovation of a home (-706) by -6.1%, those for building a home (-2,103) by 25.6% and those for other purposes4 (-458) by -14.3%. The number of applications for external refinancing saw a 21.5% decline in the last quarter of 2023. However, the number of credit applications for the purchase + renovation of a home experienced an increase (23%).

Compared to the fourth quarter of 2022, the mortgage loans granted in the fourth quarter of 2023 declined as in the rest of the year, but to a lesser extent, by -12.9% in number and by almost -15% in amount. 

This drop in number of loans granted is even more pronounced compared to 2020 (-34%). Compared to the record Q4 2019 (due to the abolition of the housing bonus in Flanders), it even amounts to -54.5%.

Also in amount, about 14.6% less credit was granted in Q4 2023 than in Q4 2022. Compared with 2020 (-27.7%) and with the exceptional fourth quarter of 2019 (-44.6%), the decline is even more pronounced.

49,000 new loans were granted in the fourth quarter of 2023 for a total amount of around EUR 8.2 billion - excluding external refinancing.

Compared to 2022, as mentioned above, this represents a decline of about 13% in number of contracts and just under 15% in corresponding amount. Compared to the fourth quarter of 2022, this shows a mixed picture: the number of loans for home purchase (-3,931) was more than 11.7% lower in the fourth quarter of 2023 than in the fourth quarter of 2022. In contrast, the number of loans for purchase with renovation (+397) saw an increase of about 14.7%. However, the number of loans for other purposes (-375, or -14.9%), the number of renovation loans (-1,623, or -15.5%) and the number of construction loans (-1,744, or -25%) also experienced a decrease compared to the fourth quarter of 2022. 

In addition, in the fourth quarter of 2023, the number of external refinances was significantly lower (-44%) than in the fourth quarter of 2022. Only about 1,700 external refinances were still granted for a total amount of just under EUR 230 million.

The average amount of a loan for building a house stabilised around EUR 210,000 at the end of 2023. This represents a decrease of just under EUR 4,000 compared to the end of 2022, but an increase of around EUR 38,000 (+22.2%) over a five-year horizon.

The average amount of a loan for the purchase of a home decreased slightly to about EUR 193,000 during 2023. However, this represents again an increase of EUR 33,000 (+20.5%) over a 5-year period.

The average amount of renovation loans experienced a steeper fall compared to one year earlier: from around EUR 70,500 at the end of 2022 to just over EUR 61,000 at the end of 2023. Nevertheless, this average amount saw an increase of just under EUR 7,000 (+12.5%) in 5 years. 

The average amount of a credit for home purchase + renovation also saw a significant decrease in 2023 to around EUR 181,500. This is the only type of credit that also experienced a decline in the average amount by around 7% over a 5-year horizon.

In the fourth quarter of 2023, once again more than 9 out of 10 borrowers (97.3%) opted for a fixed rate or a variable rate with an initial period of interest rate fixation of at least 10 years. About 2.7% of the borrowers opted for a variable rate with an initial period of interest rate fixation between 3 and 10 years. The number of borrowers opting for an annually variable interest rate was limited to 0.3%.

Given the higher interest rates (see chart below), Belgian consumers thus continue to opt predominantly for security. The number of people still opting for a variable interest rate remains low, especially as regards the annually variable interest rate. But even in case of a variable interest rate, consumers are highly protected by legislation. As such, the variable interest adapted to the evolution of the applicable reference indices can never exceed twice the initial interest rate.

The credit sector is and remains aware that mortgage lending must be done with great care and that responsible lending must remain the absolute starting point.  In that respect, the industry agrees with the regulator: lenders must continue to pay particular attention to the repayment capacity in order to avoid, as much as possible, individual borrowers taking out loans that are too large, on the one hand, and to safeguard financial stability in the long term, on the other. 

The complete statistics on mortgage credit (2000 - 2023) broken down by the destination of the credit and by type of interest rate are available on the UPC-BVK website (www.upc-bvk.be) under the heading "Press & figures".