Mortgage rates in Bulgaria remain low
They are nearly 1.5 points below the euro area average
![Mortgage rates in Bulgaria remain low](/web/files/articles/143198/narrow_image/thumb_1040x585_thumb-1040x585-img-20230104-102010.jpg)
Interest rates on housing loans in Bulgaria are not pushing off their multi-year low and at the beginning of the new year 2024. The official statistics of the Bulgarian National Bank show that the average interest rate on mortgages in Bulgaria decreased marginally by 0.1 point compared to the previous month to 2.57%.
This is despite record interest rate hikes in Europe and despite measures by the Bulgarian National Bank to increase the required reserves.
Interest rates on home loans in Bulgaria hit a record low of 2.47% in September 2022 and have risen only imperceptibly since then.
This has led to the distorted situation of mortgage loans in Bulgaria being granted at a much lower interest rate compared to those in eurozone countries, for example.
The cost of mortgage loans in Bulgaria is largely calculated on the basis of the volume of deposits, and it is because of the large liquidity in the banks that interest rates on housing loans continue to be so low. Thus, in practice, interest rates here are not affected by the decisions of the European Central Bank and the Euribor index. This is the reason why, for example, interest rates on mortgage loans in Bulgaria are almost 1.5 points below the euro area average.
The statistics also show that traditionally for Bulgaria, after the festive December at the beginning of the new year, interest rates on consumer loans fall to 8.67% or around the levels of the months before December.
In January, business loans also fell slightly, with the exception of small corporate loans of up to EUR 1 million in BGN.
Deposit rates, which have barely budged from zero over the past year, fell in January for households and rose slightly for the business sector. According to BNB data, as of January 2024, the average interest rate on the most mainstream deposit in BGN for households has fallen to 0.74%.
Interest rates on deposits for businesses, on the other hand, rose slightly in January - to 2.31% and 2.87% for those in levs and euros, respectively.
This article was translated by Kompreno.eu with the support of DeepL.