New real estate loan contracts totalled €1,667 million in November, which was somewhat less than in October.
On Tuesday, January 7, 2025, the Bank of Portugal (BdP) issued data showing that the number of new mortgage loan contracts in November 2024 was €1,667 million. Even though this is simply a monthly decrease of almost €10 million, the value is the second-highest since December 2014.
A rise that is partly attributable to government initiatives to assist youth, such as exemptions from stamp tax (IS) and municipal tax on onerous real estate transactions (IMT) when buying your first permanent residence.
"The new loan contracts have risen to €2,423 million from €77 million. The number of new contracts for housing decreased by €10 million to €1,667 million. The BdP concludes, "This value is the second highest in the historical series, which starts in December 2014."
Additionally, according to the banking supervisor and regulator, "48% of the amount of new contracts for permanent housing granted in November were credit granted to borrowers under the age of 35."
The bulletin states that the quantity of new contracts for consumption and other uses dropped by €43 and €24 million, respectively, to €540 and €216 million.
Annually, that is, in November 2024 vs the same month the year before, there is an even bigger disparity in the quantity of new housing loan contracts: €1,667 million versus €1,307 million.Credit renegotiations dropped to €559 million in November, a decline of €28 million. "The renegotiations of real estate credit, which decreased by €27 million, to €521 million," he says, were mostly to blame for the decline.
The quantity of newly signed mortgage loan agreements in Millions of euros in value is €246008001 0001 2001 4001 6001 800 202020212022202320
For 13 months, the average interest rate has decreased.
According to the BdP, the average interest rate on new real estate credit operations—which includes renegotiations that did not result from default—went from 3.40% in October to 3.29% in November. This indicates that the rate has been declining for 13 consecutive months, and it is the lowest value since January 2023.
New real estate credit contracts had an average interest rate of 3.18%, down 0.11 percentage points (p.p.). The BdP notes that the average interest rate on renegotiated contracts also dropped by 0.11 percentage points, to 3.65%. While the average interest rate for financing for other purposes decreased by 0.30 percentage points to 4.03%, the average interest rate for payroll loans for new businesses increased from 8.91% in October to 8.71% in November.
Average New Mortgage Loan Interest Rate are 51,01,52,02,53,03,54,04,55.0% 202020212022202320240,00
Nearly 80% of contracts have a variable rate
According to a BdP analysis that only looks at new loans and the total amount of loans given to people for permanent housing, 76% of new housing loans were signed in November with a mixed rate, meaning that the initial period of the contract had a fixed interest rate, followed by a variable interest rate period.
In actuality, the figure is comparable to the one observed in October (77%). In comparison to October, the weight of mixed rate contracts dropped by 1 percentage point. According to the organisation, blended rate contracts accounted for 32% of the real estate loan portfolio in November.
November's average interest rate on new operations at a mixed rate was 3.06%, which was 0.08 percentage points lower than October's. In comparison to the new operations at a mixed rate, the new variable and fixed rate operations showed higher average interest rates (3.93% and 3.56%, respectively), but also larger reductions (-0.24 p.p. and -0.09 p.p., respectively), he continues.
In November, the average monthly mortgage loan payment dropped by three euros to 417 euros. Since November 2023, it has been the lowest value.
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