Interest on housing credit falls for the third consecutive month

The Bank of Portugal released, this Thursday, statistics on interest rates and amounts of new loans and bank deposits from companies and individuals for December last year.

The entity led by Mário Centeno states that the average interest rate on new housing credit operations went from 4.23% in November to 4.12% in December. Thus, for the 3rd consecutive month, the average interest rate on new home loan operations fell again.

According to the Bank of Portugal, this rate remained higher than the euro area average, but the difference was reduced, from 0.36 p.p. in December 2022 to 0.12 p.p. in December 2023.

By type of negotiation, the average interest rates on new home loan contracts reached their maximum of the year in June (4.27%), standing at 3.98% in December. Average interest rates on renegotiated contracts grew until the end of the year, reaching 4.40% in December.

In consumer loans, the average rate of new operations, which had been 7.97% in December 2022, reached the maximum value of the year in October 2023 (9.18%) and stood at 9.07% in December. According to the entity led by Mário Centeno, throughout the year, this rate approached the euro area average, although it remained higher in December 2023 (+1.37 p.p.).

As for loans for other purposes, the average interest rate was 4.51% in December 2022, reached the maximum of the year in August 2023 (5.50%) and decreased to 5.19% in December.

Last year, the amount of new loan operations granted to companies amounted to 22.0 billion euros, a value close to that recorded in 2022 (22.1 billion euros). New loan contracts represented 84% of this value. As for new loan operations to individuals, they totaled 29.2 billion euros in 2023, 21% more than in 2022 (24.1 billion euros).

Source: Vida Imobiliária