In an encouraging trend for homebuyers, the average interest rate on new mortgage loans in Portugal has decreased for the 10th consecutive month. As of November, the average rate stands at 2.82%, marking the lowest rate seen in over three years. This decline not only benefits newly initiated contracts but also extends to those renegotiating existing loans.
According to the latest data from the Bank of Portugal, the interest rates fell slightly from October, specifically by 0.03 percentage points. Breaking it down, newly signed contracts saw a reduction of 0.02 percentage points to reach 2.82%, while renegotiated contracts dropped by 0.06 percentage points, settling at 2.84%.
When looking at the broader Eurozone landscape, Portugal ranks as having the third lowest mortgage rate, significantly lower than the Euro area average of 3.3%—a difference of 0.48 percentage points. Only Malta and Spain can boast more favorable rates, while Latvia and Estonia hold the highest mortgage rates in the region.
The data also revealed that households applied for a total of €2.1 billion in loans for purchasing residential properties in November, which is €110 million less than in October. A noteworthy highlight is that young people under the age of 35 accounted for a substantial 62% of the total loan demand, often leveraging public guarantees to aid their homebuying journey.
In the corporate sector, businesses experienced a slight dip as well; the average interest rate on loans fell to 3.66%, down by 0.01 percentage points from the previous month. However, the total amount lent to companies also decreased, with banks lending €2.23 billion, which is a reduction of €335 million.
These developments indicate a supportive environment for prospective homeowners in Portugal, making the path to securing a mortgage more accessible and financially favorable in the current economic climate.
