3.5 percent interest

Erste boss Cernko: Cheaper home loans soon

Erste CEO Willi Cernko: "Interest rates are expected to fall further from the middle of the year, which will help the construction sector.(Bild: APA/ROLAND SCHLAGER)

What the politicians promise, the banks want to fulfill quickly: Interest rates on loans for housing will fall to 3.5 percent.

The demand for cheaper construction and housing financing has already been partially fulfilled. Erste Bank CEO Willi Cernko, who is also the spokesman for the financial institutions: "We have already lowered our interest rate to 3.5 percent." At the same time, the granting of housing loans is also to be simplified, and the exceptions in particular are to be relaxed. Cernko: "We also welcome it when the federal states grant long-term loans with a low interest rate of 1.5 percent; this is not competition, but a good addition." Since the end of the year, Erste has been offering housing loans for young families at two percent up to a total amount of EUR 100,000.

In any case, 2023 was a very successful year for Erste Group Bank: the operating result rose by 38.4 percent to an operating result of 5.5 billion euros.

For 2024, particular hopes are pinned on stronger growth in Eastern Europe, where the bank is well positioned. There was notable growth in both deposits and loans, and inflation will continue to fall. The bank is gradually approaching its target of just two percent inflation in the eurozone. And it is remarkable that, despite the uncertain political situation, loan defaults remained very low.

Back to housing finance: this is to be simplified. In addition to renting and home ownership, Erste Bank sees renovation as an important focus.

Cernko: "We can manage the financing, but because of the construction crisis, it will take a year or two before there are enough projects on the market again."