Analytics, Direct Speech, Financial Services, Lithuania, Loan

‘Household borrowing for consumption purposes was rigorous – consumer loans accounted for more than 70 per cent of all new loans. With a rapid increase in wages and interest rates remaining at record-low levels, the share of household income allocated for loan repayment continued to gradually decrease’, said Simonas Krėpšta, Director of the Financial Stability Department at the Bank of Lithuania.

By the end of 2016, the total number of loans to be repaid by households in Lithuania stood at 1.2 mln, their value reaching more than EUR 8 bln. In terms of number, the bulk of loans (46.0%) consisted of loans for consumption, in terms of value – mortgage loans, which were mainly used for house purchase. By average age of adult members in a household, at the end of 2016 households in the 30–39 age group were indebted the most. In 2016, majority of new loans (47%) was granted to households in the 25–34 age group.

The share of income for loan repayment has been reducing for four consecutive years and in 2016 amounted to, on average, 25.7%. Households assigned the largest share of their income (28.4%) to repay housing loans, the smallest (8.4%) – to repay financial lease liabilities.

The average initial amount of housing loans granted in 2016 was EUR 48.5 thousand (almost EUR 5 thousand more than a year ago), while that of consumer loans – EUR 1.5 thousand, an y-o-y decrease of EUR 211. Throughout 2016, the average weighted repayment period for new housing loans granted remained basically unchanged, standing at 23 years and 11 months. In terms of financial lease, the indicator was 4 years and 9 months, consumer loans – 3 years and 8 months.