Norges Bank

Survey of Bank Lending

Lower margins on residential mortgage lending

Survey of Bank Lending

Credit demand from households and non-financial enterprises was approximately unchanged in 2021 Q3[1]. Credit standards and loan conditions were also unchanged. Margins on residential mortgage loans fell in Q3, reflecting higher funding costs. Banks expect this trend to continue in Q4. Lending margins in the corporate segment were approximately unchanged. Banks expect higher lending rates in both segments.


Residential mortgage demand was approximately unchanged in 2021 Q3 (Chart 1). Banks reported a slight increase in demand for fixed-rate mortgages, as they expected in Q2. Overall, banks expect slightly lower residential mortgage demand in Q4 (Chart 1).

Credit standards for households were unchanged in Q3 (Chart 1). Overall, banks assume slightly less tight credit standards for households in Q4 owing to a slightly better economic outlook. The use of interest-only periods fell a little in Q3, while other loan conditions were unchanged.

Chart 1

Residential mortgage demand, credit standards and lending margins

Banks reported lower margins on residential mortgage lending in 2021 Q3 (Chart 1), reflecting higher funding costs and unchanged lending rates so far (Chart 2). Banks expect that the policy rate hike will have an effect on their existing loans in 2021 Q4. Notice of lending rate increases must be given at least six weeks in advance. In the period ahead, banks expect that both funding costs and lending rates will rise. Lending margins are expected to decline further (Chart 2).

Chart 2

Banks’ operating environment, lending margins and lending rates. Residential mortgage loans


Credit demand from non-financial enterprises was unchanged in 2021 Q3 (Chart 1). Banks’ responses differed to some extent. Credit line utilisation and demand for fixed rate and commercial real estate loans were also unchanged. Banks expect no change ahead (Chart 3).

Banks reported unchanged credit standards and loan conditions for enterprises overall in 2021 Q3 and expect no changes ahead (Chart 3).

Chart 3

Credit demand, credit standards and lending margins – non-financial enterprises

Banks further reported that lending margins on corporate loans fell a little in 2021 Q3. Owing to the policy rate hike, banks expect somewhat increased lending rates and slightly higher funding costs in Q4 (Chart 4).

Chart 4

Banks’ operating environment, lending margin and lending rates – non-financial enterprises

To the question about conditions for new commercial real estate loans over the past six months, a majority of banks responded that maturities were normally five years or less and that commercial real estate mortgage loan-to-value (LTV) ratios were normally between 60% and 80%. Banks also reported that both maturities and LTV ratios were approximately unchanged, or somewhat lower, compared with pre-pandemic levels. Some tightening of credit standards is consistent with what banks reported overall for non-financial enterprises in the period since 2020 (Chart 3). Banks also reported that LTV ratio requirements for office property loans are unaffected by signs of increased remote working.

[1] The survey was conducted in the period 27 September to 12 October 2021.

In its work on monitoring financial stability in Norway, Norges Bank uses extensive statistics on developments in credit and financial markets. In order to expand the information base, Norges Bank conducts a quarterly survey of bank lending. The survey provides information on changes in the demand for and supply of credit and on changes in banks’ loan terms and conditions. Objective of the Bank Lending Survey

Published 21 October 2021 10:00
Published 21 October 2021 10:00