Saudi Residential Mortgages Slump 41% to SAR 4.37B in May

Residential mortgages issued by Saudi banks to individuals fell 41% from a year earlier to SAR 4.37 billion in May 2026, according to data from the Saudi Central Bank (SAMA).

The decline follows a period of elevated lending that peaked in early 2025. Higher interest rates have squeezed affordability for borrowers, especially first-time buyers. SAMA has held its repo rate at 6.0% since July 2024, tracking the Federal Reserve.

Saudi banks have grown mortgage books rapidly since 2020, driven by government programs like Sakani. A sustained slowdown in originations would pressure net interest income and raise the cost of customer acquisition. Banks with the largest retail mortgage exposure – Al Rajhi Bank, National Commercial Bank, and Saudi British Bank, among others – are most at risk of a credit-growth slowdown. For investors tracking the Saudi financial sector, the data is a key input for stock market analysis.

The 41% drop is steep but comes against a tough comparison: May 2025 saw record-high originations of SAR 7.41 billion. Still, the pace of decline suggests demand is weakening faster than seasonal patterns would explain. Loan-to-deposit ratios at some banks have edged lower, reducing pressure to compete on pricing.

June mortgage data is due from SAMA in late July.