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Interest rates on bank deposits continue to decline in Bulgaria. Against this background, consumer and mortgage loans are also becoming cheaper.
The base interest rate reached 0% in July 2017. The average rate on corporate bank deposits in the national currency was 0.18%. The maximum rate for households was 0.4% (BGN) and 0.30% (foreign currency).
Consumer loan interest rates fell to 7.8% in July, while mortgage rates fell to 3.8% per year.
The decline observed for several years stems, firstly, from the European Bank's monetary policy aimed at reducing borrowing costs and, secondly, from excess liquidity within the banks themselves.
The current situation in the banking sector will encourage households to seek alternative ways to invest their savings. Analysts therefore forecast further growth in demand for property, as its returns in Bulgaria's major cities are considerably higher than returns on bank deposits.
Lower mortgage interest rates will also lead to a further increase in demand for mortgage loans and rising housing prices.
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