Housing loan renegotiations fall in July

Housing loan renegotiations fell in July to 346 million euros, a decline of 32.4% year-on-year, according to data published this Wednesday by the Bank of Portugal (BdP).

According to data from the banking regulator, in July of this year, housing loan contracts worth 346 million euros were renegotiated, eight million euros less than in June and 166 million euros less than in the same month last year.

Mortgage renegotiations were, in fact, one of the main factors in the reduction in the overall value of renegotiations, which fell 30.6% year-on-year to €386 million. The quarter-on-quarter decline was €6 million.

In total, in July, new loan operations — which include completely new credits and renegotiated contracts — amounted to 3.418 billion euros, 27.9% more than a year ago, and 284 million euros more than in June.

Of this amount, 3,033 million euros related to new contracts, the highest value in the historical series and 284 million euros more than in June.

In housing loans alone, between new contracts and renegotiations, the contracted amount was 2.105 million euros, 190 million euros more than in the previous month.

In July, more than half (59%) of the amount of new home purchase contracts were made by young people aged 35 or under, a figure equivalent to that recorded in the previous month.

In consumer loans, the amount of new contracts rose by 80 million euros in the space of a month, to 636 million euros, while new operations for other purposes grew by 20 million euros to 291 million euros.

In July, the average interest rate for new consumer credit operations fell by 0.04 percentage points (pp) compared to June, to 8.82%, while for loans for other purposes, the average interest rate fell by 0.06 pp to 3.50%.

In the case of companies, new loan operations totaled 2.804 billion euros, 292 million euros less than in June.

“This decrease was observed both in new contracts and in renegotiated contracts , the amounts of which were reduced by 61 and 231 million euros, to 2,569 and 235 million euros, respectively,” says the BdP.

For companies, the average interest rate on new loan operations fell 0.02 pp compared to June, to 3.65%, against 5.11% a year earlier.