Mortgages: rates rise in August. Loans: demand is higher for businesses
The interest rate on mortgages stands at 3.56 per cent. For business loans, it falls to 3.66 per cent.
Key points
The upward trend in lending to households and businesses continues. In August, total lending rose by 3.4 per cent year-on-year, accelerating from the previous month’s figure (+3.3 per cent), and continuing the growth trend that began in March 2025. This is according to the ABI’s monthly bulletin for August. Loans to businesses received a stronger boost. For households, August marked the twentieth consecutive month of growth, whilst for businesses it was the fourteenth consecutive month of growth in lending. In July 2026, loans to businesses had risen by 4.1 per cent, whilst those to households had risen by 2.6 per cent.
Mortgage interest rates rise to 3.56 per cent
In the same month, the average interest rate on new loans for house purchases rose to 3.56 per cent (+0.16 per cent compared with the previous month; it stood at 4.42 per cent in December 2023); the average interest rate on new business loans fell to 3.66 per cent (-0.13 per cent compared with the previous month; it stood at 5.45 per cent in December 2023). The average rate on total loans (i.e. those taken out over the years) was 4.19 per cent (+0.02 per cent compared with the previous month).
Deposits up 1.8 per cent on July, reaching 1,869 billion
Total direct funding (deposits from resident customers and bonds) rose by 2.3 per cent year-on-year, continuing the positive trend seen since the start of 2024 (+2.8 per cent in the previous month). Deposits, in all forms, grew by 1.8 per cent year-on-year (+2.4 per cent the previous month): the figure stands at 1,869 billion, slightly below the record levels reached in previous months. Medium- and long-term funding, via bonds, increased by 6.0 per cent compared with a year earlier (+5.7 per cent in the previous month). Indirect funding – that is, investments in securities held in custody by banks – increased by 45 billion between July 2025 and July 2026.
The interest rate on current accounts remains at 0.32%
The average rate on new fixed-term deposits (i.e. certificates of deposit and term deposits) rose to 2.40 per cent (2.39 per cent in the previous month) and was higher than the euro area average, which stood at 2.22 per cent in July. The average rate on total deposits (certificates of deposit, savings deposits and current accounts) was 0.69 per cent. The rate on current accounts was 0.32 per cent (unchanged since July 2026).
Net non-performing loans stood at €28 billion, down from €28.6 billion in March 2026. In July, net non-performing loans accounted for 1.30 per cent of total loans. This ratio was lower than in March 2026 (1.35 per cent).
