The European Central Bank (ECB) announced on Tuesday that its bank lending survey in the euro area for October 2025 showed a strong increase in demand for housing loans. Meanwhile, demand for loans to businesses increased slightly but remained overall weak.
Lending standards mostly unchanged
Regarding lending criteria, they remained unchanged for housing loans, tightened moderately for consumer credit, and saw a small, unexpected net tightening for loans to businesses.
Property outlook and interest rates boost demand
Demand for housing loans continued to rise significantly in net terms (net percentage 28%).
Improved housing market prospects and lower borrowing rates were the main factors supporting the continued increase in demand for housing loans.
Demand for consumer credit and other household loans remained broadly unchanged (net percentage 1%), with the effect of lower interest rates and other supportive factors offset by weaker consumer confidence.
For business loans, in Q3 2025, euro area banks reported a small net increase in demand (net percentage 2%) but overall it remained weak. This followed a slight net increase in loan demand in the previous quarter. The increase was weaker than banks had expected in the previous survey round.
Loan demand was supported by lower borrowing rates and increased refinancing or debt restructuring needs, while the impact of fixed investment, inventories, and working capital was neutral. Several banks noted a negative effect of global uncertainty and related trade tensions on loan demand.
For Q4 2025, banks expect unchanged loan demand from businesses, a further net increase in housing loan demand (although more moderate than in previous quarters), and a slight rise in demand for consumer credit.
Banks reject more consumer loan applications
Banks reported a net increase in the share of rejected applications across all loan categories, with the largest net increase in rejection rates for consumer credit. The net increase was higher than in the previous quarter. For housing loans, it was the first net increase since Q1 2024.
Lending standards
According to the bank lending survey, euro area banks reported a slight net tightening of lending standards for loans to businesses in Q3 2025 (net percentage 4%).
Banks reported unchanged standards for loans to households for house purchase (net percentage 0%) and moderate net tightening for consumer credit and other household loans (net percentage 5%).
For businesses, the net tightening in Q3 followed broadly unchanged standards in Q2. This was unexpected, as banks had previously forecast that standards would remain unchanged.
Perceived risks to economic prospects contributed to stricter lending standards.
The slight net easing of standards for housing loans expected by euro area banks in Q2 2025 did not materialize, while the tightening of consumer credit standards was broadly in line with expectations. Bank risk perceptions were the main factor behind the net tightening of consumer credit.
For Q4 2025, banks expect standards to remain broadly unchanged for businesses, to tighten slightly for housing loans, and to tighten further for consumer credit.
Overall bank terms and conditions, the actual terms agreed in loan contracts, remained broadly unchanged for business loans, while they eased for housing loans and consumer credit.
The October 2025 survey was conducted between 19 September and 7 October 2025. A total of 154 banks participated in this round, with a 100% response rate.