TRANSCRIPT
Isabelle Gounin-Levy: How are bank lending rates to households evolving in the eurozone?
Thomas Humblot: Fixed-rate loans account for around three-quarters of new loans for house purchase in the eurozone. As a result, their average rate is largely influenced by the 10-year swap rate. This 10-year swap rate is a good indicator of the cost of long-term bank funding and depends on inflation expectations and long-term policy rates. It peaked in autumn 2023, then fell with disinflation and the downward revision of the ECB's key interest rate expectations. It has been trading in a range of 2.30% to 2.60% since spring 2024. These developments have been reflected, with a slight lag, in the average rate of housing loans. After peaking at 4.06% in November 2023, it fell sharply until February 2025 (3.33%) and then stabilised around that level, standing at precisely 3.28% in July 2025 according to the latest figures published by the ECB.
Consumer loan rates, for their part, are more dependent on short-term interest rates. They fell slightly, from around 8% in January 2024 to 7.46% in July 2025, but much less sharply than market rates. This is because they incorporate a risk premium that remains relatively high in an uncertain economic environment.
Isabelle Gounin-Levy: And what about loans to businesses?
Thomas Humblot: In July 2025, loans to non-financial corporations with a reference rate of three months or less accounted for 60% of new lending, and as much as 80% if the maturity is extended to one year. As a result, business loans are, on average, more dependent on short-term market rates than on long-term rates. In line with the latter, after peaking at 5.78% in November 2023, they fell until July 2025 to 3.52%.
Isabelle Gounin-Levy: How do you see the cost of credit for households and businesses evolving over the coming quarters?
Thomas Humblot: In our scenario, key interest rates are expected to stabilise at their current levels at least until autumn 2026. The moderate rise in some 10-year sovereign rates that we anticipate masks a relative stability in key interest rate expectations and in the 10-year swap rate. Such moderate increase also stems from an assumption of widening swap spreads, which measure the difference between sovereign rates and the swap rate. As a result, credit conditions for households and businesses are expected to remain fairly close to current levels over the next few quarters, based on these underlying assumptions.
Recorded on September 11th, 2025
