The average monthly mortgage payment fell in March this year to 423 euros, which is three euros less than in February. According to data published yesterday by the Bank of Portugal (BdP), this is the first decrease after more than two years of consecutive increases in the amount to be repaid on the loan.
“This was the first month since the beginning of the statistical series, in December 2021, in which there was a decrease in the average monthly payment,” the BJP points out.
Despite the decrease in the average monthly payment, its value in March (423 euros) means 62 euros more than in March 2023 (when it was 361 euros), and if compared with March 2022, it is even higher – 138 euros (285 Euro).
The average mortgage payment has increased over the past two years following a rapid rise in interest rates by the European Central Bank (ECB) in the Portuguese banking market, where most contracts had variable interest rates.
The recent slight decline in Euribor interest rates, as the ECB expects key rates to be cut, is having an impact on credit provision and is expected to continue moderately. Analysts expect the Euribor rate to reach around 3% by the end of the year.
BdP’s analysis of loans granted for the purchase of permanent housing also shows that in March the majority of new contracts (74%) were at a mixed rate – fixed at the beginning of the contract and subsequently variable. In 2023, only 18% of new home loans were at a blended rate.