Eurozone Mortgage Demand Falls 27%, Sharpest Since 2023

The European Central Bank’s third-quarter 2026 bank lending survey found that eurozone loan demand weakened, with home-purchase borrowing particularly affected and business-loan demand also falling. Banks tightened credit standards for business and consumer loans, while leaving housing-loan standards broadly unchanged; rejected applications increased across borrower groups. Lenders cited higher interest rates as a key drag on demand, and heightened risk perceptions, lower risk tolerance, geopolitical uncertainty and energy-market pressures as reasons for tighter lending. The findings indicate that ECB rate increases are cooling credit and economic activity, while policymakers face the risk of weakening growth as they try to contain inflation.