Households 

Banks report broadly unchanged residential mortgage demand overall in 2026 Q3 (Chart 1). Demand for fixed-rate loans fell slightly, while demand for first-home mortgages was broadly unchanged. Developments in overall demand were in line with banks' expectations from Q2 (Chart 2). In Q4, banks expect a slight decline in demand for first-home mortgages, but broadly unchanged demand for residential mortgages overall and for fixed-rate loans. Credit standards for households were broadly unchanged in Q3, and banks expect this to continue in Q4 (Chart 1).  

Chart 1 Overall demand, credit standards and lending spreads. Residential mortgages 

Chart 2 Residential mortgage demand 

Overall, banks report that residential mortgage lending rates and funding costs increased somewhat in 2026 Q3 (Chart 3), in line with their expectations. Banks expect lending rates and funding costs to rise somewhat further in Q4. Lending spreads for residential mortgages were broadly unchanged in Q3, and banks expect this to continue in Q4. Banks also report slightly stronger competition in Q3.  

Chart 3 Banks’ lending rates, lending spreads and operating environment. Residential mortgages 

When asked about interest-only periods on existing loans, four of eight banks report that demand fell somewhat over the past six months compared with the preceding six months. The other banks report broadly unchanged demand. Three of the banks expect demand for interest-only periods to increase somewhat over the next six months, while the others expect no change. The banks were asked about developments in various characteristics of loan volumes granted. Six banks report that debt-servicing capacity was broadly unchanged over the past six months compared with the preceding six months, while two banks report that capacity declined somewhat. Half of the banks expect broadly unchanged debt-servicing capacity in loan volumes granted in the coming six months. 

Corporates 

For non-financial corporates, banks as a whole report a slight decline in demand in 2026 Q3 (Chart 4). Credit line utilisation was broadly unchanged, while demand for fixed-rate and commercial real estate (CRE) loans fell slightly. Demand was slightly weaker than banks expected in the previous survey. Banks expect overall credit demand to edge down further in Q4. Credit line utilisation and demand for fixed-rate and CRE loans are expected to remain broadly unchanged. Moreover, banks report broadly unchanged credit standards in Q3 and expect credit standards to remain broadly unchanged in Q4.   

Chart 4 Credit demand, credit standards and lending spreads. Lending to non-financial corporates 

For corporate loans, banks as a whole report a slight increase in lending rates and funding costs in Q3 (Chart 5). Banks expect lending rates and funding costs to increase slightly further in Q4. Furthermore, banks continue to report somewhat lower lending spreads and increased competition in Q3. Banks expect lending spreads to fall somewhat further in Q4 and competition to remain broadly unchanged. 

Chart 5 Banks’ lending rates, lending spreads and operating environment. Lending to non-financial corporates

In this survey, banks were asked about their assessment of real estate developers and commercial real estate firms over the past six months compared with the same period in 2025. These questions were last posed in 2026 Q1. 

For real estate development loans, seven of nine banks report increased risk of breach of the terms of loan covenants while six report a higher risk of default (Chart 6). For each of these points, this is one bank more than in 2026 Q1.  

Chart 6 Banks’ assessment of borrowers in real estate development  

Developments in the past six months compared with the same period in 2025

As regards CRE loans, several banks report a higher risk of breach of the terms of loan covenants (Chart 7). Four of nine banks report that the risk of breach of the terms related to interest coverage ratios (ICRs) has increased somewhat, compared with two banks in 2026 Q1. Six banks report broadly unchanged risk of default and breach of the terms of the loan covenants related to equity ratios, while three report somewhat increased risk. Two banks report that the use of interest rate hedging has increased somewhat, while two report somewhat reduced use. The other banks report unchanged use. In 2026 Q1, one bank reported increased use of hedging, while two reported somewhat reduced use. 

Chart 7 Banks’ assessments of CRE borrowers 

Developments in the past six months compared with the same period in 2025