Mortgage credits increase further in third quarter of 2024
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In the third quarter of 2024, about 47,500 mortgage credit agreements were concluded for a total amount of about EUR 8.2 billion (excluding refinancings).
This represents an increase of just over 9% in the number of credit agreements issued compared to the third quarter of last year. In amount of credits granted, an increase of about 14% was recorded compared to last year.
Excluding refinances, the number of credit applications in the third quarter of 2024 increased by about 7.5% compared to the third quarter of 2023. In amount too, there was an increase of about 12% in the third quarter of 2024.
This is shown by the statistics on mortgage credit that were published today by the Professional Association of Credit (BVK/UPC).
De 50 leden van de BVK nemen samen ongeveer 90% van het totaal aantal nieuw verstrekte hypothecaire kredieten (de zogeheten productie) voor hun rekening. Het totale uitstaande bedrag aan hypothecair krediet van de BVK-leden bedraagt einde september 2023 ongeveer 275 miljard EUR.
Number of credit applications continue to rise
A comparison of the figures with those of 2023 shows that, as in the previous two quarters, credit demand continued to rise in the third quarter of 2024. As a result, lending also increased compared to last year.
Interest rates for mortgage credits continued their downward trend in the past quarter. According to figures published by the National Bank of Belgium, they fluctuated from an average of 5.17% (for loans with an initial fixed-interest period of up to 1 year) to an average of 3.12% (for loans with an initial fixed-interest period of more than 10 years) in August.
‘The further decrease in interest rates is stimulating the mortgage market, both in terms of demand and lending", according to Ivo Van Bulck, secretary general of the Belgian Professional Credit Association.
Below findings are the for the third quarter of 2024 compared to the third quarter of 2023:
Refinancing is excluded from these figures.
The number of credit applications (excluding those for refinancing) increased by about 7.5% in the third quarter of 2024 compared to the third quarter of 2023. The amount of credit applications also increased by about 12% compared to 2023. Just under 68,500 credit applications were submitted for a total amount of just over EUR 13 billion.
Mortgage credits granted increased in number by just over 9% in the third quarter of 2024 compared to the third quarter of last year. The corresponding amount also increased by about 14% compared to 2023. A total of around 47,500 loans were granted for a total amount of just over EUR 8.2 billion (excluding refinancing).
The number of loans for other purposes (+419, or +22%) together with the number of loans for renovation of a house (+1,635, or +20.5%) experienced the strongest increase compared to the third quarter of 2023. The number of loans for purchase with renovation (+214, or +8.1%) and the number of loans for the purchase of a home (+1,867, or +7%) also saw an increase. The number of loans for home construction (-172, or -4.1%) continued its 2024 negative trend.
The number of external refinancings (+352, or +23%) saw an increase in the third quarter of 2024, as in the previous quarter. This is in line with the current environment of falling interest rates. About 1,900 external refinancing operations were granted in the third quarter of 2024, totalling about €266 million.
The average amount borrowed for the purchase of a home rose to around EUR 202,000 in the third quarter of 2024. The average amount for a construction loan also increased to about EUR 230,000 in the third quarter of 2023. The average amount of purchase + remodelling loans also rose to around EUR 218,000.
In the third quarter of 2024, an overwhelming majority of borrowers (95%) again opted for a fixed interest rate or a variable interest rate with an initial period of interest rate fixation of at least 10 years. In only 0.8% of cases, borrowers opted for a loan with an annually variable interest rate.
garage, construction land, ...
I. Further growth of number of credit applications
The number of credit applications, excluding those related to external refinancing, increased by about 7.5% during the third quarter of 2024 compared to the same quarter last year. The underlying amount of credit applications also increased by about 12%. For the third quarter in a row, the number of credit applications for the relevant quarters (not counting those for refinancing) increased, after declining for several quarters in 2023.
The increase in credit applications shows a mixed picture across purposes. The number of credit applications for home construction (-340) fell by -5.7%, while those for home renovation increased (+2,224, or +23.3%). The number of loan applications for the purchase + renovation of a home (-77, or -1.8%) fell, but those for other purposes (+1,102, or +40%) and for the purchase of a home (+1,909, or +4.7%) increased. The number of applications for external refinancing then fell again in Q3 2024, by -12%.
Garage, construction land, ...
II. Number of granted credits increased in the third quarter
Similar to the second quarter of 2024, the number of loans, excluding external refinancing, also increased by about 9% in the third quarter of 2024 compared to the third quarter of 2023. The corresponding amount also saw an increase of about 14%.
Thus, rising credit demand is leading to a significant increase in the number of loans granted.
III. Increase for almost all credit purposes
Some 47,500 new credits were granted in the third quarter of 2024 , totalling just over EUR 8.2 billion - excluding external refinancing. This confirms the growth in mortgage lending over the past 2 consecutive quarters.
Overall, therefore, there was an increase of around 9% in the number of loans granted compared to the third quarter of 2023, and this decrease was noticeable for all uses except home construction.
Compared to the third quarter of 2023, number of credits for other purposes (+419, or +22%) and number of renovation credits (+1,635, or +20.5%) rose sharply. The number of credits for purchase with remodelling (+214, or +8.1%) and for purchase (+1,867, or +6.98%) also saw increases. The number of loans for home construction (-172) fell by 4%.
In addition, in the third quarter of 2024, the number of external refinances also increased by another 22%. Consequently, around 1,900 external refinances were granted in the third quarter of 2024 for a total amount of around EUR 270 million.
IV. Average loan amount rises sharply
The average amounts of credits granted also rose in the third quarter of this year.
The average amount of a credit for the purchase of a home hovered around EUR 202,000 in the third quarter of 2024 .
The average amount of a credit for the construction of a house rose to around EUR 230,000 in the third quarter of 2024.
Similarly, the average amount of a credit for the purchase of a house + renovation continued to rise to around EUR 218,000.
V. 95% of borrowers opt for a fixed interest rate
In the third quarter of 2024, again more than 9 in 10 borrowers, more specifically 95%, opted for a fixed rate or a variable rate with an initial period of interest rate fixation of at least 10 years. About 4% of borrowers opted for a variable interest rate with an initial period of interest rate fixation between 3 and 10 years. Less than 1% of borrowers still opted for an annually variable interest rate.
Although interest rates are falling (see chart below), Belgian consumers continue to overwhelmingly opt for security. The number of people opting for a variable interest rate remains low. But even in the case of a variable interest rate, consumers are highly protected by legislation. Thus, the variable interest rate can never be more than twice the initial interest rate after adjustment to the evolution of the applicable reference indices.
Responsible mortgage lending remains the starting point
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. On this point, the industry is on the same page as the regulator: lenders must exercise the necessary caution to avoid, to the maximum extent possible, individual borrowers taking out excessively large loans, on the one hand, and to preserve financial stability in the long run, on the other.
