The interest rate on new mortgages went from 0.83% to 3.24% in just one year. Today, the cost of buying a house in Portugal is 36 basis points higher than the average in the Euro Zone.
The galloping rise in interest rates over the last year has greatly aggravated the purchase of a new home. According to information released this Thursday by the Bank of Portugal, “in 2022, the average interest rate on new home loans more than tripled compared to 2021.
According to data collected by the central bank, the interest rate on new home loan contracts (made less than three months ago), rose from 0.83% in December 2021 to 3.24% in December 2022.
“This increase follows the trajectory of the Euribor rates, which in December were on average 3.03% for 12-month, 2.57% for 6-month and 2.07% for 3-month (-0.50%, -0.54% and -0.58% in December 2021, respectively),” explains the Bank of Portugal.
Interest rate on new mortgages
Since February, the interest rate on new mortgages in Portugal was lower than the rate charged by banks in the Euro Zone. But since October this dynamic changed and in December it recorded the largest differential since March 2015.
The Bank of Portugal’s data also reveal that since October the financial cost of buying a house in Portugal has exceeded the cost in the average of the euro countries: in December, the average interest rate on new mortgages in Portugal was 36 basis points higher than the rate charged by banks in the Euro Zone.
The figures revealed by the central bank also point to the contracting of 16,156 million euros of housing loan contracts in 2022, about 5.8% higher than the figures for 2021 and 42% higher than the loans granted by banks for buying a house in 2020.
