According to data from Banco de Portugal, in the last year alone, the average interest rate on new housing loans almost doubled, going from 2.23% in September 2022 to 4.26% in September this year, the highest value since February 2012.

Pressuring the rise in the interest rate on housing loans was the galloping rise in Euribor rates, which serve as an index for calculating the mortgage payment for 98% of housing loans in Portugal, and which in the last year registered fluctuations between almost tripling of its value (in the case of 3-month Euribor) or almost doubling it (in the case of 12-month Euribor).

“The rate in Portugal has increased in parallel with the 6-month Euribor (as a reference) and has even increased less, which reveals a reduction in spreads”, says Carlos Santos, professor at ISEG and reported by ECO.

Portugal's strong fluctuation in the ranking of housing credit offers in the Eurozone could be explained by the profile of contracts signed by families.

“In Portugal, the housing credit market has a proportion of variable rate loans that is higher than the European average, where the use of fixed rates is more common”, says Filipe Santos, professor and director of the Católica Lisbon School of Business & Economics. He emphasises that “thus, when the Euribor is very low (or negative), citizens with housing loans benefit, but they suffer much more with the increase in rates, as has been seen in the last 18 months”.