In 2021 Q4, credit demand from households fell slightly, while credit demand from non-financial enterprises was unchanged. Credit standards were approximately unchanged. Margins on residential mortgage loans continued to edge down in Q4. At the same time, both lending rates and funding costs increased. Banks expect somewhat higher lending rates and funding costs in 2022 Q1, while lending margins are expected to remain broadly unchanged.

Households

Overall, banks report that residential mortgage demand fell slightly in 2021 Q4 (Chart 1). Overall, banks expect approximately unchanged residential mortgage demand in 2022 Q1 (Chart 1)

Credit standards for households were unchanged in 2021 Q4, and no change is expected in 2022 Q1 either (Chart 1). Banks expect a slight increase in the use of interest-only periods again in Q1. The use of interest-only periods increased during the Covid-19 pandemic in 2020 but has since declined.

Banks reported some decline in residential mortgage lending margins in 2021 Q4 (Chart 1), and there had been some decline in these margins also in Q3. Funding costs and lending rates increased somewhat in Q4 (Chart 2). Banks expect that both funding costs and lending rates will continue to rise in Q1, while lending margins are expected to remain broadly unchanged.

Enterprises

For non-financial enterprises, banks reported unchanged credit demand, credit standards and lending margins in 2021 Q4 (Chart 3). Credit line utilisation and demand for fixed rate and commercial real estate loans were also unchanged. Banks expect no change in 2022 Q1 (Chart 3).

Banks further reported that lending rates and funding costs for corporate loans increased somewhat in 2021 Q4 (Chart 4). This increase is expected to continue in 2022 Q1.

The survey was conducted in the period 13 December 2021 to 4 January 2022.