A sharp surge in new housing loans marked Greece’s retail banking sector in the first quarter of 2026, driven by historically low interest rates. Meanwhile, lending to small businesses remained stable, and consumer credit accelerated—contributing to a notably stronger overall loan origination picture for the period, according to the Hellenic Banking Association (HBA).
Housing Loans Surge Amid Record-Low Rates
Data from the HBA shows a striking 77% year-on-year increase in new housing loans in Q1 2026—following a 46% rise in 2025—and confirming the market’s gradual recovery after years of contraction. This rebound coincides with falling borrowing costs: according to the European Central Bank, the average fixed-rate mortgage interest rate for terms up to five years dropped to 2.95% in February 2026—the lowest level in Greece in nine years. That places Greece fifth among eurozone countries for the most competitive mortgage rates, well below the euro-area average of 3.37%.
Loan Volumes and Breakdowns
In total, over 117,000 new retail loans were disbursed in Q1 2026, amounting to approximately €1.6 billion—a 26% annual increase. Of these, 13,756 were housing loans totaling €672.8 million.
Among them:
- 4,860 loans (€438 million) were fully bank-funded, without state support;
- 1,791 loans (€191 million) were issued under the government-backed My Home II program;
- More than 7,100 additional subsidized loans—worth around €43 million—were granted through other supported initiatives.
Stable SME Lending
Lending to micro and small enterprises—with annual turnover up to €2.5 million and loan amounts up to €1 million—held steady, declining only marginally by 0.6% year-on-year. This follows a strong 10.5% growth in 2025. Nearly eight out of ten eligible SMEs that applied for new financing or increased credit limits received funding in Q1 2026: 9,132 disbursements totaling €546 million.
Consumer Credit Gains Momentum
Consumer lending saw 94,169 borrowers receive €385 million in loans—a 12% annual increase. The largest share by value—€129 million—was issued through physical bank branches to 14,633 borrowers. A larger number of borrowers—29,163—received loans via digital banking channels, with disbursements reaching nearly €92 million. Auto loans—including for cars and motorcycles—exceeded €102 million, covering some 8,600 vehicles.
A Shift Toward Hybrid Banking
The evolving loan landscape reflects not just growing volumes—but also changing customer engagement. Traditional bank branches are increasingly transforming into advisory hubs offering personalized service, while routine transactions continue migrating to digital platforms. This hybrid model—blending human expertise with digital convenience—is now central to how Greek banks serve their customers.