Banco de Portugal reported that housing credit in the country grew 11 percent year-on-year in July to exceed 118 billion euros. The expansion represents the highest annual growth rate recorded for home loans since February 2003.
Data released by the central bank shows total home lending reached 118,000 million euros by the end of July. That total is 11,697 million euros higher than the same month last year and 1,223 million euros above the level recorded in June.
Housing credit outpaced overall borrowing by individuals, which rose by 10.6 percent year-on-year to hit 153,522 million euros. The central bank indicated that government measures for young people likely contributed to the rise. State guarantees allow workers up to 35 years old easier access to the housing market, supported by tax exemptions.
Banco de Portugal serves as the central bank of the Portuguese Republic and supervises the national financial sector. Aside from mortgages, consumer and other household lending totaled 35.5 billion euros at the end of July. That figure reflects a monthly increase of 177 million euros and an annual growth rate of 9.4 percent.
Business loans and sector growth
Total lending to businesses reached 78 billion euros at the end of July, according to figures from the regulator led by Governor Alvaro Santos Pereira. Corporate loans increased by 438 million euros compared to June, representing an annual growth rate of 6.2 percent, up from 5.8 percent in the previous month.
Credit extended to construction companies grew by 12 percent year-on-year in July, while loans for real estate activities rose 2.3 percent. Borrowing across commerce, transport, and accommodation sectors registered an annual variation rate of 5 percent, climbing from 4.8 percent in June.
Micro and medium-sized enterprises drove much of the corporate growth. Micro business loans saw their annual variation rate rise to 12.5 percent in July, up from 11.7 percent in June. Medium enterprise loan growth increased to 2.5 percent from 1.5 percent in June. Annual growth for large companies remained unchanged at 0.7 percent.
Household savings and Euribor rates
Portuguese household deposits stood at 206,781 million euros at the end of July. Although deposits grew by 1,453 million euros from June, the annual growth rate slowed to 4.5 percent compared to 4.8 percent recorded the previous month.
Mortgage rates in Portugal are closely tied to the Euro Interbank Offered Rate, the benchmark rate used across the eurozone. Benchmark Euribor rates showed mixed movements on Thursday, with six-month and 12-month rates falling while the three-month rate moved higher.
The three-month Euribor rate rose by 0.003 percentage points from 2.554 percent on Wednesday to reach 2.557 percent. The increase keeps the three-month benchmark at its highest level since March 2025.
