Home loan: Interest rate on new contracts decreases for the 9th consecutive month.

Average interest rate on new housing loans continues to fall.

According to the Bank of Portugal (BdP), as reported on Notícias ao Minuto, the average interest rate on new home credit contracts has dropped for the 9th consecutive month.

In June, it went from 3.71% in May to 3.68% in June, remaining below the year-on-year value and comparing with 4.2% one year earlier.  

"By type of negotiation, the average interest rate on new housing credit contracts decreased by 0.02 percentage points in June compared to May, to 3.59%, marking the eighth consecutive month of declines, compared to 4.08% a year earlier," the news article reads. Meanwhile, "the average interest rate on renegotiated contracts fell to 4.03% in June, compared to 4.07% in May and 4.27% in the same period."  

The data from BdP reflects an average monthly payment of 424 euros for the third consecutive month, an increase of 33 euros compared to the same month in 2023.

In addition, statistics also reveal that the 6-month Euribor represented, once again, in June, the largest share of 'stock' of credits for permanent own housing with variable interest rate.

"In the month under review, the six-month Euribor represented 37.5% of the total, surpassing the 12-month Euribor (33.7%), and remaining distant from the three-month Euribor (25.7%)," clarifies the news.

As for the fixed rate in June, it was chosen in 4.6% of new loans for permanent own housing, while the hybrid was in 78.1% and the mixed in 17.3% (a year ago this was in two thirds of contracts).

As early amortizations represented less in June, 0.82% of the 'stock', decreasing by 0.09 percentage points compared to the previous month.

Already the total early amortizations, including contracts completed by amortizing the debtor's debt, consolidation of credits into a new contract, and credit transfers to another bank, represented 90% of the processes with amortization in June.

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