CEPI - European Association of Real Estate Professions

The average interest rate on new loans for house purchase in Portugal fell to 2.25% in July, 0.75% less than at the end of last year (3%). It is the largest decline in the Eurozone in proportional terms (25%) and helps to explain mortgage growth in recent months.

 

According to the newspaper “Expresso”, Portugal has the lowest interest rate of the three remaining economic adjustment programme countries, with the fall of 0.75% observed between December 2014 and July of this year being the largest decrease in terms relative to the single currency.

The Portuguese seem to be more interested in borrowing money from the bank to buy a house. According to the publication, based on data from the Bank of Portugal (BdP), the average rate applicable to new credit agreements for housing dropped to 2.25% in July, when at the end of last year it was at 3%. This reduction of 0.75% corresponds to a 25% reduction in the rate which was the highest amongst Eurozone countries in these seven months, according to the latest statistics of the European Central Bank (ECB).

Cyprus, with a fall of 24.8% (1.09 points), and France with 17.3% (0.45 points), occupied the second and third positions respectively in the ranking of the largest reductions in rates between December and July.

Currently, Portugal has the seventh lowest rate on housing loans, above all other countries which benefited from the European economic adjustment programme in the Eurozone. Greece has no information available for July of this year, but Irish banks are charging 3.53% and the rate is 3.3% in Cyprus. Spain, which was the subject of a lighter rescue programme for the banks, has currently slightly lower rates than Portugal, with an average rate of 2.14% on new loans in July.


Source: Expresso Newspaper (Portugal) 12/09