Homebuyers in Portugal are catching some relief as mortgage interest rates fall again, marking 19 consecutive months of decline. According to the latest data from Portugal’s National Statistics Institute (INE), August saw housing loan rates drop to 3.307%—the lowest level since April 2023.
This steady decrease mirrors the downward trend in Euribor rates, the key reference for most Portuguese variable-rate loans, following the European Central Bank’s (ECB) loosening of monetary policy to curb inflation. Since peaking near 4.7% in January 2024, home loan rates have retreated by a hefty 1.35 percentage points, helping families save on their monthly payments.
Although average monthly installments have stabilized at €394 since June, borrowers are seeing tangible benefits: in August, the interest component dropped by €3 to €199, while the portion going toward repaying the loan principal rose by €3 to €195. However, the average outstanding capital on home loans edged up again to €72,862—a €592 increase from July.
This ongoing trend is a welcome sign for current and prospective homeowners, as falling interest rates help ease the financial pressure on mortgage borrowers across Portugal. If the ECB continues its current stance, Portuguese families may enjoy even gentler mortgage conditions in the months to come.
