The support for young people purchasing their first homes is transforming the housing loan market as demand has increased, as reported by the Bank of Portugal (BdP).
“With this support, demand for loans has increased,” states the banking supervisor, in a post shared on Instagram.
From the start of the year until August, “banks have granted more housing credit, particularly to young people.”
Additionally, “the proportion of young people in new housing loans has grown,” according to the supervisor.
Notably, “banks are also lending more money on average for housing credit.”
Young people represent 59% of new housing loans up until August.
The proportion of young people in the amount of new housing credit contracts rose from 53% last August to 61% in the same month this year, according to BdP data.
Recent benefits for young people accessing their first permanent home have contributed to the growth of housing credit, with young people now having “a more significant presence in new credit,” as noted by the BdP in an analysis published today.
Between January 2022 and July 2024, the share of young people in new contracts for purchasing permanent homes was 44%. In August 2024—following the enactment of a decree-law exempting young people from the Municipal Property Transfer Tax (IMT) and Stamp Duty (IS)—their share increased to 53% of the total amount of new contracts.
For the first eight months of 2025, with the effects of another measure establishing the State’s personal guarantee scheme for young people up to 35 years, they accounted for 59% of the new credit for purchasing permanent homes.
According to the central bank, until August, the accumulated amount of new contracts for permanent home loans reached 12 billion euros, compared with 8.2 billion euros for the same period in 2024.
Those aged up to 35 contracted 7.1 billion euros of this total, surpassing the 3.5 billion euros recorded in the same period in 2024.
Borrowers over the age of 35 contracted 4.9 billion euros, just 200 million euros more than in the first eight months of 2024.
Since January 2022, the monthly amount of new contracts for permanent home loans reached a low in April 2023 (598 million euros) and has shown a growth trend since then.
Regarding the average amount of credit granted to young people for purchasing permanent homes, “it has remained practically unchanged” from January 2022 (136,100 euros) to December 2023 (134,700 euros).
However, in 2024 “a rising trend began,” increasing to 159,200 euros in August, after the law exempting young people from IMT and IS took effect.
In August this year, the average amount of credit for permanent home loans granted to young people was 192,600 euros, marking a 43% increase compared to December 2023.
For borrowers over 35, the average credit amount for purchasing permanent homes increased less during the same period: it rose from 127,300 euros in December 2023 to 159,200 euros in August 2025, representing a 25% change.
The BdP indicates that the average price of permanent homes acquired with credit by young people rose 8% in the first eight months of 2025, from 218,400 euros in December 2024 to 235,700 euros in August 2025. In the previous period, it had risen 14%.
The central bank notes that the average price of homes purchased by young people remained below those of borrowers over 35, with this gap widening in the first eight months of this year.
In August, homes acquired with credit by those over 35 cost an average of 275,400 euros, 39,800 euros more than those for young people. In 2024, the average difference was 29,000 euros.
Despite the lower average price of homes acquired with credit by young people compared to other borrowers, young people secure a higher average credit amount, showing less reliance on personal savings from the latter group.
In August 2025, the average amount of credit obtained by young people constituted 82% of the average home acquisition price, higher than the 58% observed among borrowers over 35.
During the first eight months of this year, with the enactment of the State’s personal guarantee, this ratio increased by seven percentage points for young people, while it decreased by one percentage point for borrowers over 35.
The housing credit stock reached 107.1 billion euros in August, with 23% associated with young borrowers’ contracts, up three percentage points from the previous year.
In August, this stock grew 8.4% year-on-year, with young people contributing to almost all the variation.
According to the BdP, the housing credit stock has shown positive and increasing annual rate changes since June 2024, with both age groups of borrowers contributing to this acceleration: Contributions from young borrowers rose from 2.7 percentage points in June 2024 to 8.2 percentage points in August 2025, while those from borrowers over 35 moved from -2.6 points to 0.1 percentage points.
