Blog · Mortgage market
How much more can banks lend?
Mortgages in Bulgaria are among the cheapest in the EU because banks lend from their own, almost free deposits rather than from the market. How large that buffer is, which banks have the most of it, and what could erode it — from the banks’ reports to the Bulgarian National Bank and ECB statistics.
Published: 26 October 2026 · data: Bulgarian National Bank and ECB, as of 30 June 2026Loans to deposits
77 cents of lending for every euro of customer deposits
More deposits than loans
The buffer banks lend from
Average cost of deposits
Weighted, households and firms; euro area — 0.87% (ECB, June 2026)
In current accounts
Share of household deposits, June 2026
The buffer
€91bn of deposits, €70bn of loans.
At the end of June 2026, banks in Bulgaria held €91.2 billion of customer deposits and €70.3 billion of customer loans. The loan-to-deposit ratio is 77.2%: for every euro of deposits there are 77 cents of lending. That leaves €20.8 billion that banks can lend without raising money on the market.
The buffer is not shrinking. Over the year, loans grew faster in percentage terms (+17.1% against +15.5% for deposits), but in euros deposits added more: +€12.2 billion against +€10.3 billion of new lending. So the buffer has actually grown — from €18.9 billion to €20.8 billion.
For households the gap is even wider: €58.6 billion of deposits against €32.8 billion of loans — a ratio of 56%.
The price of money
Why this money is cheap.
Weighted across all types of deposit — current, term and savings — banks in Bulgaria pay households and firms around 0.23% a year. In the euro area the same measure is around 0.87%, almost four times as much. The reason is the structure: about 73% of household deposits in Bulgaria sit in current accounts (€41.5 billion out of €56.9 billion, according to ECB data), which pay practically no interest.
| Weighted average deposit rate, June 2026 | Bulgaria | Euro area |
|---|---|---|
| Households | 0.15% | 0.81% |
| Firms | 0.39% | 1.05% |
| Total | 0.23% | 0.87% |
Rates by deposit type from ECB statistics, weighted by the size of each type. Second-source check: the interest banks actually paid on customer deposits in the first half of 2026, according to their reports to the Bulgarian National Bank, works out at about 0.26% a year.
This is the mechanism behind “Floating on paper, fixed in practice”: as long as a bank raises money almost for free and has more of it than it needs, there is no reason for its mortgage rate to follow Euribor.
By bank
Who still has “fuel”.
Customer loan-to-deposit ratio as of 30 June 2026 and a year earlier. The lower the ratio, the more spare deposits a bank has.
| Bank | Loans / deposits | A year earlier | Spare deposits, €m |
|---|---|---|---|
| TBI Bank | 106.2% | 100.4% | −105 |
| ProCredit Bank | 88.4% | 90.3% | 269 |
| UniCredit Bulbank | 85.9% | 81.3% | 2,244 |
| Bulgarian-American Credit Bank | 84.1% | 80.6% | 206 |
| Postbank | 83.1% | 89.5% | 1,970 |
| DSK Bank | 81.1% | 78.8% | 3,542 |
| UBB | 80.0% | 79.8% | 3,198 |
| First Investment Bank | 70.1% | 72.4% | 2,177 |
| Allianz Bank Bulgaria | 67.4% | 70.1% | 739 |
| D Commerce Bank | 66.3% | 64.2% | 353 |
| Tokuda Bank | 64.1% | 53.6% | 79 |
| Investbank | 62.1% | 58.5% | 640 |
| Central Cooperative Bank | 40.7% | 44.7% | 2,913 |
| Texim Bank | 36.3% | 43.0% | 268 |
| Municipal Bank | 36.3% | 29.5% | 890 |
| International Asset Bank | 31.2% | 31.4% | 1,129 |
| All banks | 77.2% | 76.1% | 20,830 |
Customer loans and deposits, excluding central banks and credit institutions. Excludes branches of foreign banks and the Bulgarian Development Bank: they are funded mainly by their head office or by the state, so their ratio is not comparable. The total row covers all 23 banks and branches.
- The big four are between 80% and 86%: they lend actively, but each has around €2 to €3.5 billion of spare deposits.
- TBI Bank is the only one above 100% — it specialises in consumer lending and does not offer mortgages.
- Central Cooperative Bank, Municipal Bank, Texim and International Asset Bank lend out only 31–41% of their deposits — the most unused money relative to their size.
Bulgaria in Europe
The cheapest deposits in the euro area.
On the weighted average cost of household and corporate deposits, Bulgaria ranks last in the euro area: 0.23% against an average of 0.87% and 1.27% in France. The closest to us are Greece (0.25%) and Cyprus (0.26%).
Bulgaria’s loan-to-deposit ratio is around the middle: 75.8% against 87.2% for the euro area. It is highest in Finland — 130%, where banks lend more than they collect in deposits — and lowest in Cyprus, at 47%. In Romania the ratio is lower than ours, at 67.4%.
| Market | Loans / deposits | Weighted average cost of deposits |
|---|---|---|
| Bulgaria | 75.8% | 0.23% |
| Euro area, total | 87.2% | 0.87% |
| Highest in the euro area | Finland 130.2% | France 1.27% |
| Lowest in the euro area | Cyprus 46.6% | Bulgaria 0.23% |
| Croatia | 75.2% | 0.42% |
| Greece | 56.4% | 0.25% |
| Romania (March 2026) | 67.4% | no comparable data |
| United Kingdom | no comparable data | sight 1.65%, time 3.36% |
Euro area: ECB, June 2026 — 21 countries, the same definitions. For Bulgaria the ECB ratio is 75.8% because it counts only euro-area customers; from the banks’ reports in the table above it is 77.2%. Romania: National Bank of Romania, Financial Stability Report, June 2026. United Kingdom: Bank of England, effective rates on household deposits, June 2026; no weighted average is published.
The risks
What could change the picture.
If loans and deposits keep growing at last year’s pace, the ratio will rise by about 1 percentage point a year and would reach 100% in close to two decades. This is not a forecast — it only shows that a shortage of deposits is not the near-term risk.
The near-term risk is the price of deposits, not their quantity:
- If people move money out of current accounts into term deposits, government bonds or euro-area banks that pay more, Bulgarian banks will have to raise deposit rates — and that will feed through to mortgages.
- Term deposits are already getting dearer: according to ECB data, the rate on new term deposits of up to one year in Bulgaria has been between 1.0% and 1.6% in 2026, after around 1% at the start of the year.
- Competition from banks operating across the euro area makes it easier for savers to look for a better return.
For the buyer
What to do with this.
- The large buffer works in your favour today. Banks have money and compete for good borrowers — compare at least three offers.
- A bank with plenty of spare deposits has room for better terms. That is a reasonable inference, not a guarantee — but it is a good argument when negotiating.
- Think about the whole term, not today’s rate. A fixed period of 5–10 years buys predictability if the price of deposits starts to rise.
Methodology
Where the figures come from.
Loans and deposits come from each bank’s quarterly financial reports to the Bulgarian National Bank as of 30 June 2025 and 30 June 2026 — customer loans and deposits, excluding central banks and credit institutions. The 2025 reports are in leva and have been converted to euro at the fixed rate of 1.95583. The cost of deposits is a weighted average: rates by deposit type from the ECB’s harmonised statistics are weighted by the size of each type. As a second check, we also calculated how much interest banks actually paid on customer deposits in the first half of 2026 according to their reports to the Bulgarian National Bank — about 0.26% a year, close to the 0.23% from ECB statistics.
Second check: the Bulgarian National Bank’s monetary statistics for June 2026 show household deposits growing by 18.6% and household loans by 21.0% — close to the figures calculated here from the banks’ reports (+19.3% and +21.7%).
- Bulgarian National Bank — bank financial reports, June 2026 (in Bulgarian; compared with the June 2025 reports)
- ECB — household deposit rates in Bulgaria and in the euro area
- ECB — structure of household deposits in Bulgaria (current accounts versus total)
- ECB — loans and deposits by euro-area country (balance sheet statistics, June 2026)
- National Bank of Romania — Financial Stability Report, June 2026 (in Romanian)
- Bank of England — effective interest rates, June 2026
- Bulgarian National Bank — monetary statistics, June 2026 (as reported by Finansov savet, in Bulgarian)
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