According to the Bulgarian National Bank (BNB), the expansion of mortgage loans continues as banks in Bulgaria report an increase in housing credit. As of the end of August 2024, outstanding housing loans reached 23 billion, 203 million leva, reflecting an annual growth of 25.5%. This marks an increase from July, when mortgage loans rose by 25.1%.

Since the beginning of the year, housing lending has consistently broken records each month. In June, the reported growth was 24.8%, followed by 24.4% in May. April saw an increase of 23.9%, while March experienced a growth of 20.5%. Earlier in the year, February and January recorded respective increases of 17.9% and 16.5%.

Two weeks ago, the BNB issued a warning to commercial banks to temper the mortgage market, which may primarily impact potential borrowers with lower incomes. On September 11, the regulator stipulated that the ratio of a loan secured by residential property to the value of that property should not exceed 85%. Additionally, it was mandated that mortgage installments must not exceed 50% of the borrower's monthly income, with a maximum repayment period limited to 30 years.

The BNB also announced that renegotiated loans for any given quarter must not exceed 5% of the total value of the bank's newly granted or renegotiated loans from the previous quarter, along with introducing further accountability requirements for financial institutions.

In contrast to the robust growth in mortgage lending, consumer lending is experiencing a more modest increase. By the end of August, consumer loans reached nearly 18.8 billion leva, marking a 14.7% rise compared to the same month in 2023. Overall, loans to households exceeded 43.7 billion leva, which is equivalent to 22.3% of GDP, and this reflects a 19.7% increase compared to August 2023, with a 19.6% annual increase reported for July 2024.

Meanwhile, data from the BNB reveals that deposits in the non-governmental sector approached 132.9 billion leva, representing 67.8% of GDP, with an annual growth of 9.1%. In July, the increase in deposits was recorded at 9.9%. Loans extended to the non-governmental sector amounted to nearly 98.4 billion leva, or 50.2% of GDP, showing a 14.1% rise compared to August of the previous year.