Mortgage credit: Interest rate decreases for the 7th consecutive month.

The implicit housing credit interest rate has dropped to 4.417%.

The implicit interest rate on home loans fell for the 7th consecutive month in August, to 4.417%. The portion corresponding to interest continued to represent 60% of the average installment.

The data is from the National Statistics Institute (INE), disclosed by Notícias ao Minuto, and indicates that the implicit interest rate on housing credit contracts "fell to 4.417%, a value 7.0 basis points lower than the previous month, accumulating a 24.0 basis points reduction since the peak reached in January 2024 (4.657%)".

It is worth noting that the interest rate decreased from 3.713% in July to 3.665% in August, in contracts signed in the last three months. This represents an accumulated decrease of 71.5 basis points since the peak reached in October 2023.

"For the funding destination 'home acquisition', the most relevant in the set of housing credit, the implicit interest rate for all contracts decreased to 4.377% (-7.1 basis points compared to July). In contracts signed in the last three months, the interest rate decreased by 5.2 basis points compared to the previous month, settling at 3.639%," the news explains.

In addition, in August, the average monthly installment of all contracts stood at 404 euros, one euro below compared to July and 25 euros more than in August 2023 (monthly variation of -0.2%). Considering that, of the installment value, 242 euros (60%) corresponded to interest payment, 62 euros (40%) to amortized capital, and in August 2023 the interest component represented 57% of the average installment amount (379 euros).  

In the contracts signed in the last three months, the average installment increased by six euros in July compared to the previous month, to 617 euros (down 1.0% from the same month last year).  

In August, the average amount owed for all contracts increased by 345 euros compared to July, reaching 66,874 euros.

For contracts signed in the last quarter, the average amount owed was 128,791 euros, 1,250 euros more than in July.

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