Lisbon, June 18, 2025 (Lusa) - The implicit interest rate on housing loans fell in May for the 16th consecutive month, to 3.570%, 9.3 basis points lower than in April and the lowest figure since May 2023, according to figures released by INE on Wednesday.

"The implicit interest rate on housing loans fell to 3.570%, 9.3 basis points lower than in the previous month, accumulating a reduction of 108.7 basis points since the peak reached in January 2024 (4.657%)," said Statistics Portugal (INE).

In contracts signed in the last three months, the interest rate fell from 3.060% in April to 3.057% in May, registering a monthly decline of 0.3 basis points and a cumulative decrease of 132.3 basis points since the peak reached in October 2023.

The implicit interest rate on housing loans reflects the ratio between the total interest due in the reference month and the outstanding principal at the beginning of that month (before amortisation).

For house purchase, the most important use of mortgage credit, the implicit interest rate for total contracts fell by 8.9 basis points compared to April, to 3.555%.

In contracts concluded in the last three months, this rate fell by 0.7 basis points compared to the previous month, standing at 3.052%.

In May, the average monthly instalment for all contracts stood at €395, one euro less than in the previous month and nine euros (-2.2%) less than in May 2024.

Of this €395, €210 (53%) corresponded to interest payments and €185 (47%) to capital amortisation.

In contracts signed in the last three months, the average instalment rose by 20 euros in May compared to the previous month, to 641 euros, and increased by 6.3% compared to the same month in 2024.

In May, the average capital outstanding for all contracts rose by 629 euros compared to April, standing at 71,042 euros.

In contracts signed in the last three months, the average amount outstanding was €153,717, €3,486 more than in April.

PD/ADB // ADB.

Lusa