The house payment may be slightly relieved next month. For loans with a 12-month interest rate, it could even be the first reduction in more than two years. Bigger declines only from June onwards and if the European Central Bank moves forward to cut interest rates.
With the rising cost of living, fewer and fewer people are taking out loans to buy a house.
In March, according to Banco de Portugal, there was a decrease in the number of new mortgage loans. It fell 0.6% compared to the same month last year.
“There were 20% fewer property transactions in 2023 but the price rose by around 8%, that is, we are transacting fewer but more expensive properties. This for families who are struggling, with 24 months of constant increases, is complicated for families, even due to fears about the international context, to move towards the decision to acquire property”, explains Nuno Rico, from DECO.
Anyone who has already done so and taken out a loan has endured, since the start of the war in Ukraine, consecutive increases in interest rates. And there are those who are paying 80% more to the bank today than they paid two years ago. But From now on there may finally be good news.
“The month of May will bring good news for those who have variable rate housing loans because for the first time in all maturities, whether 3, 6 or 12 months, we will see a reduction in installments”, adds the same person responsible for DECO .
The decline will be insignificant for those who have Euribor for 3 months. It will be around 3 euros. Those who have a 12-month rate and will have their contract reviewed in May, for the first time in two years, will experience a reduction in the installment: 5 euros.
The most significant drop will be in the 6-month Euribor. In this case, the cut could be 25 euros.
“It will be a little more significant in 6 months because we will be comparing it with the value of November 2023, when the peak of Euribor evolution in 6 months was reached”, says Nuno Rico.
From here everything points to the value should continue to decrease across all timeframes.
There is also the expectation that, in June, the European central bank reduce interest rates for the first time. But even if that happens, the descents will be gradual and not very significant.
“At DECO we are working with the perspective that Euribor in 6 months will be around 3% at the end of the year”.
Currently, the 6-month Euribor is 3.8%, more or less the same value as the 3-month rate. The 12 is at 3.7.
