Interest Rates on Loans and Deposits: BNB Data for July

Financial conditions for households and businesses in the country are undergoing dynamic changes in July, with current data from the Bulgarian National Bank (BNB) shedding light on the movement of interest rates on loans and deposits. The analysis of monetary statistics for the period reveals diverse trends that directly affect both consumer lending and the savings habits of the population.

Increase in the cost of consumer and housing loans

After a period of relative stability, the average interest rate on consumer loans in BGN saw a significant increase in July. BNB data indicate that it rose by 0.40 percentage points, reaching 9.15 percent. In line with this, the annual percentage rate of charge (APR) on the same loans also increased, albeit by less—by 0.39 percentage points, to 9.53 percent. This increase means that the cost of borrowing for households is rising, which could put pressure on family budgets.

At the same time, housing loans in BGN maintain their relatively low cost, despite a minimal increase. The average interest rate on them has risen by only 0.01 percentage points to 2.44 percent. The annual percentage rate of charge for housing loans has also increased slightly, reaching 2.75 percent. This trend shows that the mortgage lending market remains stable, providing good conditions for real estate investment.

Changes in business and other loans

Financial conditions for businesses also underwent changes in July. The interest rate on loans up to EUR 1 million, agreed in BGN, increased by 0.08 percentage points to 4.06 percent, while for loans above this amount, the increase was more modest—by 0.01 percentage points to 4.04 percent. In contrast, business loans in EUR are becoming cheaper. The interest rate on loans up to EUR 1 million, agreed in EUR, decreased by 0.24 percentage points to 4.05 percent, and on those over EUR 1 million—by 0.47 percentage points to 4.22 percent. This mixed dynamic could encourage businesses to review their currency lending strategy.

A decrease is also observed in the interest rates on other types of loans granted to various organizations. The average interest rate on "other loans" in BGN, which include funds provided under the National Energy Efficiency Program, fell by 0.10 percentage points to 4.05 percent. A similar trend is observed with loans for employers and self-employed persons, where the interest rate decreased by 0.11 percentage points to 4.14 percent.

Dynamics in overdrafts and credit cards

The overdraft market also shows interesting trends. The average interest rate on overdrafts in BGN for households decreased by 0.05 percentage points to 13.69 percent. In contrast, interest rates on credit cards (outside the interest-free grace period) in BGN increased by 0.04 percentage points, reaching 21.36 percent, making them one of the most expensive financial products.

Deposit activity of households and businesses

Against the backdrop of changes in lending, household deposits with agreed maturity also registered an increase in interest rates. The interest rate on deposits in BGN rose by 0.08 percentage points to 0.95 percent, while for those in EUR the increase was significantly more noticeable—by 0.40 percentage points, reaching 1.42 percent. This shows that savings accounts in EUR are becoming more attractive. Business deposits also show mixed trends, with interest rates on term deposits in BGN decreasing by 0.85 percentage points to 1.52 percent, and on those in EUR—by 0.17 percentage points to 1.48 percent.