Hundreds of people struggling to pay their home loan, according to Estonian cbank

TALLINN - While the overall situation in home loan statistics in Estonia remains fine for the time being, hundreds of people are already struggling with their loan repayments, Postimees reports.

Bank of Estonia economist Gaili Gruning said that the volume of non-performing loans was still small as at the end of February. The share of home loans with repayments overdue by more than 60 days was around 0.1 percent in February, and their total number was approximately 600.

While the share is small, an increase in overdue loans has nonetheless been registered in the home loan portfolio. In September 2022, overdue home loans in Estonia accounted for 1 percent of the portfolio and their combined volume was 106.4 million euros, whereas by the end of February the percentage had risen to 1.3 percent and the volume to 140.3 million euros. The share of home loans overdue up to 30 days rose from 0.9 percent to 1.1 percent. Their volume is also the largest at 115.2 million euros.

The share of loans overdue by more than 90 days remained unchanged but their combined value grew from seven million euros to 8.4 million. According to Swedbank, the reasons for home loan repayments being overdue are diverse with long-term payment difficulties caused by loss of employment, significant decrease in income or loss thereof.

The share of overdue loans gives an idea of how Euribor rates affect life in Estonia. The said share has grown from 1.3 percent to 1.6 percent for households and from 0.6 percent to 1.4 percent for businesses.