Mortgage credit at all-time high driven by tax exemptions.
The number of new housing credit contracts reached a record value, mainly driven by the financing granted to young people under 35 with tax exemptions, according to data released by the Bank of Portugal (BdP).
Mortgage credit at a record value justified by the exemption from IMT and stamp duty taxes.
The total amount of new mortgage contracts increased by 4.5 billion euros, reaching 17.6 billion euros in 2024. This is the highest value recorded since December 2014, according to the data from BdP disclosed in Notícias ao Minuto.
According to the banking supervisor, growth was driven by credit granted to borrowers under 35 years old, who accounted for 47% of new permanent own housing contracts starting from August 2024 (compared to 37% between January and July).
This increase was influenced by the entry into force, in August, of Decree-Law No. 48-A/2024, which exempts young people up to 35 years old who acquire their first home from paying IMT and stamp duty.
Read all about this measure: Young people with exemption from IMT and IS with no income limit, but rather on the value of the house
The new loans contracts to individuals showed a growth of 6.0 billion euros, totaling 26.5 billion euros in 2024. These operations represented 77% of the total new loans to individuals, an increase from the 63% recorded in 2023.
The increase occurred in all credit purposes, although it was more expressive in housing credit.
Consumer credits and other purposes also increased, with increases of 0.7 billion euros and 0.8 billion euros, respectively, reaching 6.4 billion euros and 2.5 billion euros.
The average interest rate on new housing credit operations fell from 4.19% in December 2023 to 3.20% in December 2024, a decrease of 0.99 percentage points (pp). This was the 14th consecutive monthly reduction.
Throughout 2024, the average interest rates for new and renegotiated home loans followed the same trend, settling at 3.11% and 3.60%, respectively, by the end of the year.
In euro area countries, the average interest rate on new housing loans decreased by 0.65 percentage points, reaching 3.35%. Portugal had the 7th lowest interest rate in the region, below the euro area average.
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