SEB Compared Profiles of People Who Obtained Home Loans
OREANDA-NEWS. December 03, 2013. SEB compared the profiles of people who obtained home loans in 2009 and 2013 using the data of more than 3,000 loans. The proportion of individuals who have taken a loan (individuals or households with one breadwinner) has increased significantly after the recession.
When in 2009, families had taken more loans than individuals (52 and 48 per cent, respectively), then in 2013, 56 per cent of home loans were given to individual borrowers and only 44 per cent of loans had a co-applicant. Thereby, a total of 63 per cent of women who obtained a loan do not have a co-applicant. The average term of loans taken by women has increased – from 17.5 years in 2009 to 19.5 years this year. The percentage of men who have taken a loan alone has increased, but it is significantly lower than for women – 52 – and the average loan term has remained the same (19.5 years).
“The recovered economic environment has especially encouraged young women living alone, and families in which the woman is the sole or main breadwinner, to improve their living conditions. For instance, 47 per cent of 20–35–year–old women who have obtained a home loan this year have taken it alone, four years ago this percentage was 40 per cent. Thanks to an increase in real wages and significantly decreased unemployment there are now more persons and households capable of borrowing. At the same time, improved future outlooks and possibilities to hedge loan risks with insurance encourage long-term financial obligations to be assumed alone,” commented Triin Messimas, Development Manager of Private Loans at SEB.
According to the Bank of Estonia, the volume of new home loans given in Estonia in the first nine months of 2013 exceeds the volume of new home loans in the same period in 2009 by 61 per cent or EUR 253 million. A great deal of the current loan demand is most likely the result of the implementing of plans for improving living conditions that were postponed during the recession.
* SEB home loan client survey in November 2013. The survey was based on the data of 3,188 home loans given by SEB in the first nine months of 2009 and 2013.