Nearly a third of new home loans had minimum spread

In a year marked by a surge in housing loans, partly fueled by state guarantees for young borrowers, Portuguese banks have reduced the profit margin, or spread, they charge on each mortgage. The number of clients securing loans with spreads below 0.5 percentage points, the lowest rates available in the country, doubled compared to the previous year.

This trend indicates a more competitive lending environment for homebuyers. The reduction in spreads suggests banks are willing to accept lower profit margins, potentially to attract more customers or in response to market conditions and European averages.

Despite the significant increase in low-spread mortgages, the Bank of Portugal has expressed no specific concerns. Officials note that the current lending practices and spread levels are consistent with those seen across the rest of Europe, implying that Portugal's housing credit market is operating within a broader regional context.

The data reflects a dynamic shift in the Portuguese housing market, where access to credit has become more favorable for borrowers, particularly young individuals benefiting from state support. The trend of decreasing spreads, while notable domestically, is viewed by regulators as part of a wider European financial landscape.