Mortgage Interest Rate Dropped to 0.792% in August

September 20, 2021 – Ana Custódio

The average outstanding debt and monthly instalments stood at 57,115 euros and 236 euros.

According to the National Statistics Institute’s report on Implicit Interest Rates on Housing Loans, the interest rate fell to 0.792%. Outstanding debt and monthly instalments stood at 57,115 euros and 236 euros, respectively, in August of this year.

The implicit interest rate in the set of mortgage contracts reached 0.792% in August, down from the previous month when it stood at 0.8%. For contracts signed in the last three months, the interest rate rose from 0.674% in July to 0.689% in August. In the month under review, the average capital in debt rose by 325 euros, settling at 57,115 euros. The average instalment rose by 1 euro to 236 euros.

INE estimates that for loans for buying a home, the most common use for such loans, the implicit interest rate fell to 0.807% (-0.9 b.p. m-o-m). For contracts signed in the last three months, the INE reported an increase in the interest rate to 0.679% (0.670% in the previous month).

As a whole, the average monthly payment rose by one euro to 236 euros. Of that, the National Statistics Institute estimates that 38 euros (16%) correspond to interest payments and 198 euros (84%) to amortised capital. The analysis also states that the average instalment rose by 19 euros to 304 euros for contracts signed in the last three months.

The average outstanding debt rose by 325 euros m-o-m in August to reach 57,115 euros. For contracts entered into in the last three months, the average outstanding principal stood at 117,960 euros, up by 1,145 euros m-o-m.

Translation: Richard D K Turner

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