Household and corporate credit demand was broadly unchanged in 2022 Q2. Overall credit standards were also broadly unchanged. Banks reported somewhat higher lending rates and funding costs for both residential mortgage loans and corporate loans in Q2. At the same time, residential mortgage lending margins were approximately unchanged, while corporate lending margins increased somewhat. Banks expect the developments in lending rates, funding costs and lending margins to continue in Q3.

Households

Overall, banks reported that residential mortgage demand was approximately unchanged in Q2 compared with Q1, and that they expect approximately unchanged demand in Q3 (Chart 1). Demand for fixed-rate loans was broadly unchanged in Q2, while banks expect a slight increase in Q3.

Credit standards for households were on the whole unchanged in Q2, and banks expect no change in Q3 (Chart 1). At the same time, some banks reported that the economic outlook is a factor that in isolation had a somewhat tightening effect on their credit standards in Q2, and the same applies to banks’ expectations for Q3. Several banks also expect the use of interest-only periods to increase somewhat in Q3.

Banks reported broadly unchanged residential mortgage lending margins in Q2 (Chart 1). Both funding costs and lending rates increased somewhat (Chart 2). Banks expect both funding costs and lending rates to continue to edge up somewhat in Q3, while lending margins are expected to be little changed.

Enterprises

For non-financial enterprises, banks as a whole reported unchanged credit demand and credit standards in Q2 (Chart 3). Banks expect no change in Q3. At the same time, some banks reported that the economic outlook is a factor that in isolation had a somewhat tightening effect on their credit standards in Q2, and several banks expect the same effect in Q3. Credit line utilisation, demand for fixed-rate and commercial real estate loans were unchanged in Q2, and banks expect no change in Q3.

Banks report that lending margins on corporate loans increased somewhat in Q2 (Chart 3). Both funding costs and lending rates increased somewhat (Chart 4). The rise was more pronounced than expected in the survey for Q1. Banks also expect lending margins, funding costs and lending rates to rise somewhat in Q3.