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Interest rate on new housing loans rises

After a slight drop in August, the interest rate on new housing loans rose again in September to the highest value since February 2012.

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According to ECO, housing credit has become more expensive again. According to data released this Thursday by the Bank of Portugal, the average interest rate on new housing loans increased by 0.03 percentage points in September, going from 4.23% in August to 4.26% in September.


This increase comes after there was a slight correction in the interest rate on new housing loans in August, and keeps the financial cost of buying a house in Portugal above the average financial cost in the Eurozone.


Banco de Portugal also reveals that “in September, new housing loans with a mixed rate (that is, loans with a fixed interest rate in an initial period of the contract, followed by a period in which the interest rate is variable) represented 55 % of total new home loans.” It was the highest value since Banco de Portugal published this data, which dates back to December 2021.


The regulator also highlights that “the average monthly installment on the stock of loans for permanent home ownership increased by 6 euros in September, standing at 413 euros. This increase is in line with that seen in August. Compared to September 2022, the average monthly installment rose by 109 euros.”


Banco de Portugal also notes that the average interest rate on new loans for consumption also rose (from 8.93% to 8.98%), but the average interest rate on new loans for other purposes decreased, from 5.52% to 5.35%.


The regulator also states that “in September, new loan operations to individuals totaled 2,504 million euros, 165 million more than in August”, also highlighting that “there were increases in housing and other purposes of 141 and 39 million euros, respectively.” In consumer loans, there was a decrease of 15 million euros.




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