According to data from the Bank of Portugal (BdP), the average mortgage loan repayment is expected to increase by EUR 92 by December 2023 compared to June this year, with the increase in 41% of contracts amounting to less than EUR 50.
“The average amount owed by private individuals of about 64 thousand euros translates into an estimated average payment of 279 euros in June 2022,” says the BdP in the Financial Stability Report (REF) released this Wednesday, in which it estimates that “this increase of 92 euros by the end of 2023” compared to the end of the first half of the year.
The total amount of residential loan repayments from individuals is expected to increase from “approximately EUR 390 million in June 2022 to EUR 520 million in December 2023”.
Of the loans contracted, 41% should have a variation of less than 50 euros during this period, while 18.1% could show increases of more than 150 euros.
One of the reasons for these increases is due to the cost of repayments on home loans from banks – about 90% have variable interest rates. The data in the REF point to values of 3% in December 2023 for the three-, six- and 12-month Euribor rates.
The central bank adds that these debt service increases should contribute to an increase in the stress rate by 4.8 percentage points to 21.5% by December 2023.
The regulator adds that by the end of 2023, 10% of home loan contracts will have this ratio above 41.2%, while in June 2022 only 5.1% of these contracts had a stress rate above 40%.
“Home loans taken out between 2019 and 2022 are those with the largest increase in average repayments between June 2022 and December 2023″adds the REF, which underlines that these are the contracts most vulnerable to an effort rate increase: 6.5 percentage points to 23.7%.
Source: DN
