Central Bank Lending Survey 26 August 2026

Central Bank lending survey 26 August 2026 lending survey monetary policy Listen

The Central Bank conducts quarterly lending surveys among the four commercial banks. In the surveys, the Bank asks about respondents’ assessment of credit supply and demand; changes in their lending rules, lending rates, and interest premia; and the factors that have determined those changes in the past three months. Respondents are also asked about their expectations for the coming six months. The results of the most recent survey, conducted during the period 1 July-14 August 2026, are based on the average of participants’ responses.

Highlights

According to the banks’ responses, the supply of mortgage loans to households increased marginally over the past three months, and the banks expect a slight increase in the coming six months. The banks expect the supply of other loans to households to remain unchanged during the period. (1) Demand for motor vehicle loans grew marginally in the past three months, according to the survey responses, but is expected to taper off slightly in the six months ahead. Household demand for other loans was unchanged in the three months prior to the survey, and the banks expect it to remain unchanged in the coming six months.

The banks’ responses indicate that their rules on mortgage lending to households had been eased slightly in the past three months, while rules on other household loans were unchanged. The banks assume that rules on household loans will be unchanged over the next six months. Furthermore, they expect competition with other credit market entities for household loans to increase in the next six months.

According to the banks’ responses, interest rates and interest premia on inflation-indexed loans to households were unchanged over the past three months; however, the banks expect rates on indexed loans to rise in the coming six months because of an increase in the Central Bank of Iceland’s key rate. According to the survey, interest rates on non-indexed loans to households rose in the past three months because of the increase in the key interest rate, but interest premia declined over the same period. The banks expect interest rates on non-indexed mortgages to continue rising in the six months ahead, in line with expectations of a higher key interest rate and increased funding costs.

The banks reported that the supply of corporate credit had been unchanged in the past three months, and they expect it to remain broadly unchanged in the next six months. According to the banks’ responses, demand for credit among businesses was also unchanged in the past three months. Furthermore, the banks assume that demand from large companies will remain unchanged in the six months ahead, while demand from smaller firms is expected to shrink marginally.

The banks’ rules on corporate lending were unchanged in the three months prior to the survey, but it is noted that developments and prospects for individual companies or sectors and risks relating to collateral affected both short- and long-term lending to large companies. The banks do not expect their lending rules to change in the next six months. They also expect competition for corporate lending to remain unchanged over the six months ahead.

According to the banks’ responses, interest premia on króna-denominated corporate loans had risen in the past three months. Rates on non-indexed corporate loans rose at the same time, mainly because of the increase in the key rate, but also because of higher funding costs. Rates on indexed loans were unchanged. Interest rates and interest premia on foreign currency loans to companies declined at the same time, however, because of reduced funding costs.

The banks expect rates on króna-denominated corporate loans to rise in the next six months, particularly in the case of non-indexed loans. According to the banks’ responses, this is due primarily to expectations of a higher key interest rate, but also to higher funding costs. Changes in the regulatory framework offset this slightly, however. The banks also expect interest premia on non-indexed loans to large firms to rise at the same time. Interest rates and interest premia on foreign currency loans to large companies are projected to decline in the six months ahead, as funding costs are expected to fall.

See further on a special page:
Central Bank of Iceland lending survey
.

See as well here:
Central Bank of Iceland lending survey, Q3 2026 .

(1) In the survey, loans to households are divided into three categories: residential mortgages, motor vehicle loans, and other loans. Loans to businesses are classified as either long-term or short-term loans. Furthermore, survey participants are asked about foreign-denominated lending to both households and businesses.