Euro Zone Lending Growth Holds up Even as Survey Points to Weakness
A net 27% of banks reported weaker housing-loan demand as higher rates and tighter credit standards weighed on borrowers, the ECB said.
- On Monday, the European Central Bank released a survey showing 7% of Euro zone firms reported difficulties securing bank loans in the three months to September, up from 5% in the previous quarter.
- Heightened risk perceptions and reduced risk tolerance drove tighter credit standards, as the ECB's rate increases aimed to combat energy-driven inflation amid geopolitical uncertainty and rising energy costs.
- Demand for housing loans fell sharply, with a net 27% of banks reporting a decrease in the third quarter—significantly more pronounced than the 12% drop lenders had anticipated.
- Banks also reported deteriorating access to retail funding, the worst reading since 2011, and increased difficulty raising money on debt securities and money markets.
- Lenders expect to tighten standards for all lending categories in the final three months of the year, while most banks have yet to introduce quantitative criteria for assessing AI-related loans.
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39 Articles
Discouraged by rising interest rates, fewer and fewer Europeans are borrowing to buy a home. The demand for mortgage loans has fallen sharply in the third quarter of 2026, more...
The European Central Bank (ECB) today released the October 2026 survey on bank loans, which shows that 9% of banks restricted credit granting standards to companies in the third quarter, which are internal guidelines or loan approval criteria, against 7% in the second quarter.
Eurozone Mortgage Demand Falls as Interest Rates Rise, ECB Finds
Independent Journalism and Public Interest Reporting. Demand for home loans across the eurozone fell more sharply than banks expected in the third quarter of 2026, as higher interest rates, weaker consumer confidence and a less favourable housing market discouraged borrowing. The latest European Central Bank (ECB) Bank Lending Survey found that a net 27% of banks reported falling demand for housing [...] This article was originally published by …
Banks see higher credit risks and expect the trend to be even stronger. Interest rate developments also affect business with real estate and consumers.
Euro zone mortgage demand falls as rates rise, ECB survey shows
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