According to Jornal Económico, early repayments of housing loans almost doubled in 2023, going from 5.5 billion euros, in 2022, to 10.1 billion euros. This data was released on Thursday 1 February by Banco de Portugal (BdP).

“Total early repayments (which include contracts finaliSed by amortiSation of the debtor's debt, credit consolidation in a new contract and credit transfers to another institution) represented 83% of early repayments in 2023”, details the regulator.

This increase is observed after the Government allowed, in 2023, the early repayment of housing loans without penalty, a measure that was extended this year.

On Thursday 1 February, the Bank of Portugal also revealed that new loan operations to individuals totalled 29.2 billion euros in 2023, 21% more than in 2022. The amounts were reduced by 10% in 2023, to 19.9 billion euros.

“This reduction was observed in all purposes: in housing (-12%, to 12.8 billion euros), in consumption (-4%, to 5.1 billion euros) and in other purposes (- 13%, to 1.9 billion euros)”, he indicates.

Credit renegotiations soar

On the other hand, credit renegotiations increased from two billion euros in 2022 to 9.3 billion euros in 2023, with this “evolution being almost entirely explained by housing credit renegotiations, which, in 2023, reached 8.8 billion euros, a value five times higher than that recorded in 2022 (1.6 billion euros)”.

The average interest rate on new housing credit operations rose from 3.24% in December 2022 to a maximum of 4.27% in September 2023, ending the year at 4.12%. This rate remained higher than the euro area average. In consumer loans, the average rate on new operations, which had been 7.97% in December 2022, reached the maximum value of the year in October 2023 (9.18%) and stood at 9.07% in December.

In the case of companies, the amount of new loan operations granted reached 22 billion euros, close to the value recorded in 2022. While new contracts represent 84% of this value, renegotiations represent 16%, despite having grown by 53% . The average interest rate on new operations rose from 4.54% to 5.77%.

The regulator also states that, in 2023, there was an increase in new housing credit operations with a mixed rate (that is, loans with a fixed interest rate in an initial period of the contract, followed by a period in which the interest rate is variable ), which went from 16% of the amount of new operations in December 2022 to 71% in December 2023.

Record increase in interest on deposits

This Thursday, the regulator also revealed that Portugal recorded the second-highest increase in average interest rates on new term deposits from individuals in all euro area countries, behind only Latvia. “With this increase, Portugal went from the second lowest position in December 2022, to the 13th position in December 2023, still below the average rate observed for this group of countries (3.29%)”, he says.

The average interest rate on new private term deposits increased by 2.73 percentage points between December 2022 and December 2023, from 0.35% to 3.08%.

“This is the largest annual increase observed since the beginning of the series, in 2003. The amount of new term deposit operations from individuals totalled 94 billion euros in 2023, almost double that recorded in 2022 (49.4 billion of euros)”, says the Bank of Portugal, with the biggest increase in the average remuneration being observed for new deposits with a term of up to one year: from 0.30% in December 2022 to 3.10% in December 2023.

In companies, the average remuneration went from 0.97% in December 2022 to 3.46% in December 2023.