Home loan rates have fallen to a new all-time low in Portugal. They fell by three hundredths in October to 1.53%, the lowest since 2004, according to data released by the Bank of Portugal (BdP).
This means that banks are charging less on new home loans. In fact, rates are below the Eurozone average this year. The average interest rate for new operations in the Eurozone was 1.89% in October, while at the end of 2016 it was 1.78%, slightly lower than the rate in Portugal at the time.
In the Financial Stability Report, released last week, the institution led by António Costa warned banks, even so, of the dangers of granting easy credit, admitting the possibility of adopting restrictive measures that make access to mortgage loans more difficult. The supervisor said he wanted to prevent banks from facing a new scenario of bad loans in the future.
Consumer credit increases.
While interest rates have fallen in the case of home loans, the truth is that they have risen again in the case of consumer credit. In October, the average interest rate on new operations rose from 7.20% to 7.23%. Even so, it's below this year's maximum: 7.58% in February. These figures are above the Eurozone average, where the average rate on new consumer loans is no more than 5.59%.
The Bank of Portugal also reveals in the statistical release that new loans for housing, consumption and other purposes totaled 706 million, 390 million and 156 million euros, respectively.