Early repayments of housing loans amounted to 6,600 ME in 2022


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Early repayments of housing loans rose in 2022, with customers paying 6.6 billion euros in advance, 15% more than in 2021, the Bank of Portugal (BdP) announced today.

According to the banking regulator and supervisor, last year there were 141,952 early repayments on mortgage contracts, amounting to around €6.6 billion, 15.1% more than in the previous year, and “the increase was more pronounced in the second half of the year”.

Households decided to repay their loans early (partially or fully) in view of the period of rising reference interest rates, which increases the price of the loan and thus the monthly installment, and taking advantage of the start of the temporary suspension period of the penalty for early repayment.

Loan renegotiations also increased, in this case by 17.4%, with the amount renegotiated rising by 38.4%.

Porto city in Portugal
Porto city in Portugal

“A total of 41,332 renegotiations were carried out, covering 39,417 mortgage loan contracts and a total renegotiated amount of approximately €4.2 billion”, says the BdP in the Credit Markets Monitoring Report for 2022.

In 2022, the amount of housing loans granted increased by 6.8%, below the 36.4% growth of 2021, but still above the levels recorded before the COVID-19 crisis.

The amount of housing loans granted has slowed down over the quarters, according to the BoP, and in the last quarter of 2022 it even fell by 14.2%, with the slowdown in credit accompanying the context of a significant increase in Euribor reference rates.

Last year, an average of 9,644 mortgage contracts were signed per month, with total loans granted amounting to €1,313 million.

The average amount per mortgage loan contract was €136,143, 7.5% more than in 2021.

At the end of 2022, banks had around 1.5 million mortgage loan contracts in their portfolio (4.5% more than in the previous year), corresponding to an outstanding balance of €100.9 billion (6.4% more).

The average maturity of new contracts decreased from 32.9 to 31.8 years, while for contracts held by banks the average maturity increased slightly (from 33.5 to 33.6 years).

In 2022, 80.8% of mortgage contracts had a variable rate, still below the 84.9% of 2021. The mixed rate increased from 10% of contracts in 2021 to 12.3% in 2022, as did the fixed rate from 5.1% to 6.4%.

The average spread on new variable-rate contracts decreased slightly again to 1.09 percentage points (1.14 in 2021).

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