Conducted during the third quarter, the surveys shed light on why loan growth in Greece, especially in business lending and increasingly in consumer credit, has been running ahead of European averages.
In Greece, demand for both corporate and consumer loans continues to rise, while lending standards remain broadly unchanged. For businesses in particular, borrowing conditions still lean slightly in their favor, reflecting an easing of standards earlier in the year. The picture across Europe, however, is very different: banks there tightened credit conditions in the third quarter, moderately for corporations and more sharply for consumer loans.
Despite a small uptick, demand for business loans in Europe remains weak. Mortgage demand, on the other hand, continues to grow robustly. The overall contrast with Greece—where corporate and consumer loan applications are rising while mortgage demand has cooled—is striking.
The ECB survey suggests that European banks expect credit standards to tighten slightly for mortgages and more noticeably for consumer lending in the final quarter of 2025. They also anticipate further growth in mortgage demand, albeit at a slower pace, and only a marginal increase in interest in consumer loans.
The surveys, conducted quarterly, rely on questionnaires completed by senior bank executives. They reveal not only the evolution of loan demand across categories but also whether rejection rates for loan applications are increasing or declining. The responses include forward-looking assessments of demand as well as banks’ intentions to tighten or loosen lending criteria.
In Greece, lending standards remained stable during the third quarter. Because an easing had already taken place in the second quarter, this stability effectively preserved a slightly more favorable environment for corporate borrowing. Mortgage demand, which soared early in the year due to the government’s “My Home 2” housing program, fell sharply in the following quarter and showed only modest signs of recovery in the third. Many applicants approved under the program struggled to find eligible homes that matched both the program requirements and their personal preferences.
By contrast, consumer loan demand—which began rising in 2024—continued to grow steadily through 2025, establishing a clear upward trend by the third quarter. Business loan demand, muted in the 2023–2024 period, also regained momentum.
Rejection rates in Greece appear to fluctuate more with demand than with supply. The drop in mortgage demand in the second quarter slightly reduced mortgage rejections, while a parallel dip occurred in consumer credit. This pattern shifted in the third quarter, when the surge in consumer loan applications brought higher rejection rates.
For non-financial corporations, lending criteria were effectively unchanged in the third quarter, and overall terms remained marginally more relaxed than earlier in the year. Corporate loan demand increased accordingly. For households, lending conditions stayed the same for both mortgages and consumer loans, although banks applied slightly stricter terms to mortgages. Demand for housing loans fell, while demand for consumer credit increased.
Looking ahead, Greek banks do not expect business lending terms to tighten further before the end of the year. They anticipate steady criteria in the fourth quarter of 2025. Corporate loan demand is expected to continue rising, supported both by financing needs and the availability of alternative sources of funding. Rejection rates for business loan applications are projected to remain stable.
Mortgage lending terms became somewhat tighter in the third quarter, but banks foresee no further changes in either mortgage or consumer credit standards in the coming months. They also expect demand for both categories to remain broadly unchanged through the fourth quarter.
