Mortgage Payments Decrease in December

Homeowners in Portugal will see some financial relief in December, with reductions of up to €130 for an average mortgage of €150,000 over a 30-year term. Monthly payments on contracts due for review next month will drop significantly, driven primarily by declines in Euribor rates, which serve as the benchmark for most home loans in the country.

While mortgage payments remain well above 2021 levels—when rates began climbing to decade-high peaks—2024 is showing signs of easing, offering some respite to Portuguese households after years of financial strain.

With inflation under control, the European Central Bank (ECB) started loosening its monetary policy over the summer. Since June, under the leadership of Christine Lagarde, the ECB has reduced rates by 75 basis points. Another rate cut of 25 basis points is anticipated during the next meeting on December 12.

Further cuts from the central bank are expected next year, reflecting a challenging macroeconomic environment, with uncertainties surrounding key eurozone economies like Germany and France, as well as the impact of increased tariffs in the U.S. under the new Trump administration.

Families can look forward to more disposable income in the coming year, thanks to expected reductions in mortgage payments. Forward contracts on Euribor suggest that three- and six-month rates could drop to around 2% throughout 2025, signaling continued financial relief for homeowners