Greek banks are expressing satisfaction with the rebound in household lending, which this year is heading for its strongest performance in 11 years.
After a long period of contraction stretching from 2010 through 2024, the trend has shifted markedly in 2025. According to the latest data from the Bank of Greece, new mortgage and consumer loan contracts reached 2.16 billion euros between January and July, nearly matching the levels last seen in 2014. That figure is 353 million euros higher than in the same period last year, representing an increase of 18%.
The housing loan surge
The key difference compared with previous years lies in the growing role of mortgages within the overall lending mix. Home financing totaled €1.06 billion in the first seven months of the year, a jump of 32% year-on-year. Consumer credit also expanded, though at a slower pace, with new amortizing loans rising 9.75% to €1.097 billion. In effect, disbursements in the two categories were almost equal.
Executives expect mortgage lending to overtake consumer loans by end-2025, a positive shift as housing loans offer longer terms, stronger security, and steadier income.
In fact, credit expansion in mortgages—negative for years—is edging closer to positive territory. During June and July, private-sector loan balances rose between 0.5% and 0.7%. Mortgage contraction narrowed to around -1%, from -3% a year earlier, while consumer lending accelerated above 6%.
Boost to bank earnings
Banks’ organic income is already benefiting from interest revenues and loan-related fees. Management aims to accelerate retail lending over the next three years, supported by strong liquidity, favorable conditions, and rising household income. Mortgages are seen as the main growth driver, with demand boosted by first-home buyers and the government’s “My Home II” program.
Rates and affordability
Rising property prices make homeownership reliant on bank financing, while easier eurozone monetary policy supports lending. With Euribor near 2%, banks are offering more attractive loans. In July, average mortgage rates fell to 3.52%—110 bps lower than last year—and competition may push them down further.
