New home loans rose 40% last year, suggesting similar growth in mortgage lending this year.
Kathimerini data shows the mortgage market has grown to €930 million in 2021, up from €660 million in 2020, while estimates for 2022 put new issuance at around €1.2 billion.
The increased demand is reflected in the number of home loan applications, which according to the overall market stood at 60,000 last year versus 42,000 in 2020, signaling a significant recovery in the market after years of stagnation.
The timing of both making the decision to buy a home and financing the purchase with a loan is exceptionally good for several reasons, according to bank officials:
* Low long-term interest rates – particularly fixed rates – which are at historic lows.
* The prices of real estate, which remain below 2019 levels despite the recovery observed in recent years and remain affordable for the average household.
* The increase in rent, ie a mortgage tranche, may well be lower than the average monthly rent.
* The tax incentives for buying a home, such as B. the tax exemption for parental allowance and gifts up to €800,000, the reduction of the uniform property tax (ENFIA), the incentives for energy renovation, etc.
According to Piraeus Bank Executive General Manager Vasileios Koutentakis, “low long-term interest rates on mortgages, particularly fixed ones, are reinforcing the view that borrowing to buy a house might make more financial sense than renting it.”
The preference for fixed rates was clearly reflected in last year’s spending, which according to Pantelis Maraveas, deputy general manager of the National Bank, “affected about 80% of all new mortgages, with 10-year rates starting at just 2.8%. Combined with a long-term loan of up to 40 years that the bank offers, this results in a particularly low monthly rate.”
The fixed rate option is convenient for borrowers as interest rates happen to be at record lows so it makes sense to take out such a deal now.