Euro zone banks raised bar for mortgages in third quarter, ECB says -Breaking
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FRANKFURT, (Reuters) – Eurozone banks have tightened mortgage access in the last three months of September. They expect to do so again in the fourth quarter as they turn more cautious.
While access to credit by companies was unaffected, the ECB Bank Lending Survey revealed that there was an increase in demand for housing loans for householders. These households also experienced less favorable terms every time a mortgage loan was issued.
“For housing loans, the net tightening was related to banks’ risk tolerance and their cost of funds and balance sheet constraints,” the ECB said.
Banks expect further tightening credit standards in the fourth quarter 2021. However, there will be no increase in household demand for mortgages for home purchase.
The approval criteria for mortgages in the largest eurozone economies were tightened in France, Spain, and Germany while remaining unchanged in Italy.
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