When is the best time to take out a home loan?

Know the right time to ask for a housing loan and save thousands of euros.

Buying a house is an important decision for most people and usually involves resorting to a mortgage loan.  

But is there an ideal time to move forward with this financial commitment? The answer depends on several factors, including interest rates, the evolution of the real estate market, your financial situation, and even the country's economic context.

The impact of interest rates.

The interest rates are one of the main factors to consider before taking out a home loan.  

In periods of low rates, the cost of financing is lower, making credit more accessible. However, when interest rates are high, the total amount to be paid for the loan will be higher.

• Euribor Rates: Since most mortgage loans in Portugal are indexed to the Euribor, tracking its evolution can help decide the best time to move forward.  

• Fixed or variable rate: If rates are low, it may be advantageous to choose a fixed rate, guaranteeing a stable installment over time. If they are trending downward, a variable rate may be more advantageous.

Read more: Mortgage credit: Fixed, mixed or variable interest rate?

The context of the real estate market

House prices vary according to demand and supply. In periods of high demand, prices rise, making purchases less accessible.  

On the other hand, if there is a reduction in demand (for example, due to an economic crisis or an increase in interest rates), prices can decrease, creating opportunities to buy a house at a lower cost.

• If the market is high: it can be difficult to find good opportunities and houses tend to appreciate quickly.

• If the market is down: It may be easier to negotiate prices and get better financing terms.

Read more: Real estate market: Projections foresee 8% growth in 2025

Your financial stability.

Regardless of the external context, the best time to take out a mortgage is when you have a stable financial situation. Before moving forward, evaluate:

• Your income and professional stability;

• The ability to saving for the down payment usually 10% to 20% of the home value.

• The impact of credit provision on your monthly budget.

• Possible additional expenses, such as taxes, insurance, and property maintenance.

Learn here: Home Loan: How to know if I have financial capacity?

Supports and special conditions

The government and banks are offering incentives for home acquisition, such as interest rate bonuses or programs for young buyers (like the current public guarantee for young people up to 35 years old that allows 100% financing). Being attentive to these opportunities can make a difference in the total cost of credit.

Discover the measure: 100% financing in home credit for young people: How does it work?

The best time to get a mortgage depends, therefore, on several factors. Keeping track of interest rates, the state of the real estate market, and your personal financial situation are essential steps before making a decision.  

If you plan to buy a house, plan ahead and consult a credit intermediary to find the best solution for your case. The agents of Poupança no Minuto help in all bank intermediation, without commitment and without costs, to understand if you have financial capacity and the best proposal for you. Simulate now here: Poupança no Minuto