In March, the number of applications for housing loans at Bigbank increased by 10% compared to February and by 60% compared to March of last year. According to the head of Bigbank Estonia, Jonna Pekhter, the market activity is driven by the reduction in credit margins initiated by banks in January.

“However, the number of actual transactions in the Tallinn apartment market in the first quarter was relatively small compared to the number of loan applications. This may indicate that many have concrete plans to purchase new housing in the near future,” noted Pekhter, as quoted by the bank’s press service.

Pekhter believes that one of the reasons for the growing interest in purchasing property is the new directive from the head of the Bank of Estonia, which came into effect on April 1, establishing a new calculation method for the maximum ratio of loan payments to the borrower’s monthly income.

If the average housing loan size in Bigbank was 110,000 euros in March, it could increase by 20% in the coming months, according to Pekhter.

“For example, a person with a net income of 1,700 euros can now get a loan of up to 141,000 euros instead of the previous 120,000 euros. For purchasing an apartment, this could mean, for instance, the ability to acquire housing with an additional room – more spacious and comfortable,” added the head of Bigbank.