Mortgage payments fall to lowest in more than a year and a half

  • ECO News
  • 18 June 2025

Mortgage interest rates have been falling for 16 months. The rate fell to 3.57% in May, bringing the average house payment to the lowest since October 2023.

Mortgage payments fell in May to their lowest level in more than a year and a half, reflecting the easing of mortgage interest rates, which have been falling for 16 months, according to data released this Wednesday by INE, the Portuguese National Statistics Institute.

Last month, the average instalment for most mortgage contracts stood at 395 euros, one euro less than in April and nine euros less than in May 2024.

The reduction in house loan costs is due to the lowering of interest rates by the European Central Bank (ECB), which since the summer of last year has been softening monetary policy amid the slowdown of prices in the Eurozone.

According to INE, the rate implicit in mortgage contracts, which has been falling since January 2024, reached 3.57% in May, the lowest in two years.

In this sense, the amortised capital and interest components of the house instalment have been balancing out: of the average monthly payment of 395 euros recorded last month, 185 euros corresponded to amortised capital (two euros more than in April) and 210 euros to total interest (three euros less).

In turn, the average capital owed to the bank continues to rise: it increased by 629 euros to 71,042 euros in May, the highest figure since records began.