Interest rate on housing loans drops to 4.277% for the 9th month in October.

Interest rate on home loans fell to 4.277% in October.

The implicit interest rate on housing credit fell to 4.277% for the 9th consecutive month in October, lower than the rate recorded in the same month last year, according to data released by the National Institute of Statistics (INE) and shared in Notícias ao Minuto.

In October, the implicit interest rate fell by 8.5 basis points compared to September, accumulating a 38 basis point reduction since the peak of 4.657% recorded in January 2024. Compared to October 2023, when the rate was 4.433%, there is also a reduction.

In contracts signed in the last three months, the interest rate decreased from 3.569% in September to 3.533% in October, a decrease of 3.6 basis points. Since the peak in October 2023, this indicator has accumulated a decrease of 84.7 basis points.

In housing acquisition credit, the most relevant category in the housing credit set, the interest rate for all contracts dropped by 8.3 basis points compared to September, settling at 4.239%. In recent contracts, the decrease was 2.9 basis points, to 3.511%.

The average monthly installment remained at 404 euros in October, the same as in September, but 12 euros (3.1%) higher than October 2023. Of this amount:

• 237 euros (59%) correspond to interest payments.

• 167 euros (41%) relate to amortized capital.

In contracts signed in the last three months, the average installment rose by 12 euros compared to September, reaching 634 euros, although it decreased by 1.6% compared to the same month of the previous year.

The average outstanding balance for all contracts increased by 406 euros compared to September, totaling 67,692 euros at the end of October.

For recent contracts, the average amount owed was 136,287 euros, an increase of 3,948 euros compared to the previous month.

The implicit interest rate reflects the relationship between the total interest accrued in the reference month and the outstanding capital at the beginning of that month, before the amortization.

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