Mortgage growth at highest level in 20 years

The number of Portuguese taking out mortgages through banks in 2025 hit a 20-year high according to data released this Thursday by the Bank of Portugal with housing loans growing 10.2% last year, the largest annual increase since 2005.

According to the supervisor, “the total amount of home loans was €111Bn (at the end of last year), €9.7Bn more than in December 2024” and €837 million more than in the previous month.

This uptick has remained uninterrupted since January, 2024 with mortgages weighing increasingly heavier on the bank balances of Portuguese households.

Despite house prices at record levels, the combination of falling Euribor interest rates, more competitive spreads, and State support for young people up to the age of 35, have created a cocktail of incentives that has driven housing and mortgage demand.

But it was not only in mortgage lending that the Portuguese resorted more to bank financing. Consumer credit and other purposes also had a year of strong growth. The Bank of Portugal reveals that “consumer loans reached €21.2Bn, 1.1Bn more than at the end of 2024”, which reflected an increase of 7.3% last year, compared to a growth of 7.5% the previous year.

SOURCE: ECO

IMAGE: Bank of Portugal