Approximately a third of recently secured home loans surpass the €150,000 mark.
The Bank of Portugal (BdP) has recently reported a substantial rise in average mortgage loan amounts in 2024, as revealed in their Credit Market Monitoring Report.
According to the report, an average of €1,491.7 million of housing credit was granted monthly in 2024, marking a 32% increase compared to the previous year. This increase can be attributed to several key factors.
Firstly, rising house prices played a significant role. The average mortgage loan amount in 2024 was €142,791, up 4.3% from the previous year. This increase closely tracks the 9.1% annual rise in house sales prices, compelling families to borrow more to afford homes.
Secondly, successive reductions in housing loan interest rates made borrowing more attractive and affordable. Lower interest rates stimulate demand for mortgages and can encourage borrowers to take larger loans.
Thirdly, the introduction of the "IMT Jovem" legislation in August 2024 likely supported increased mortgage borrowing among younger buyers by easing tax burdens or providing incentives in the housing market.
Fourthly, despite cost-of-living pressures, a stable jobs market and a generally benign economic climate helped borrowers maintain the capacity to sustain higher loans.
Lastly, although less directly mentioned, rising construction costs—particularly labor cost inflation averaging +8.0% annually—may indirectly contribute by pushing home prices higher, thereby increasing mortgage loan amounts.
The decrease in the share of contracts for lower mortgage amounts may indicate a shift towards higher-priced homes. In 2024, more than a third of new mortgages were granted for amounts over €150,000, increasing from 30.3% in 2023 to 34.8% in 2024. Conversely, the share of contracts signed for amounts under €90,000 decreased, now representing 30.5% of contracts signed (compared to 31.4% in 2023).
An average of 10,447 new mortgage loan contracts were signed per month in 2024, a 26.6% increase compared to the previous year. However, the BdP did not provide information on the total number of new mortgages issued in 2024.
The increase in the monthly average of housing credit granted suggests a rise in the average loan size for new mortgages. The Bank of Portugal did not specify the reasons for these trends in the report, nor did they provide information on the total number of new mortgages issued in 2024.
In conclusion, the increase in average mortgage loan amounts in Portugal in 2024 can be attributed to a combination of market demand dynamics and cost structures, driving banks to extend larger loans to buyers seeking to purchase increasingly costly homes. The Bank of Portugal (BdP) highlights these trends in the Credit Market Monitoring Report released in early July.
[1] Source: BdP Credit Market Monitoring Report, July 2025 [2] Source: Construction Cost Index, Portuguese Construction Association, 2024-2025 [3] Source: European Central Bank, Interest Rates in the Eurozone, 2023-2024
Investors in Portugal's real-estate market may find it exciting to know that an increase in average mortgage loan amounts was reported in 2024, as indicated in the Bank of Portugal's Credit Market Monitoring Report. This increase can largely be attributed to three factors: rising house prices, lower interest rates, and the impact of the "IMT Jovem" legislation, which may have encouraged borrowing among younger buyers. On a personal-finance note, such trends signal higher costs for prospective homebuyers. Furthermore, the decline in the share of contracts for lower mortgage amounts hints at a growing preference for higher-priced homes, potentially impacting Portugal's finance sector and the broader economy.
