For the First Time, More Portuguese Home Loans Sit on a Mixed Rate Than a Variable One, and August's Average Payment Reached 418 Euros

For as long as Portugal has had a mass mortgage market, the default way to borrow for a house here has been to accept whatever the Euribor does to you. That stopped being true in July. New figures compiled from Banco de Portugal (Bank of Portugal) data put mixed-rate contracts at 48.27 percent of the outstanding stock of housing credit, ahead of variable-rate contracts at 47.01 percent, the first time the two lines have crossed.

The crossover arrives in the same week the Instituto Nacional de Estatística (National Statistics Institute, or INE) reported that the average interest rate on the whole book of Portuguese housing loans rose again in August, to 3.162 percent.

What INE published on Friday

The implicit interest rate across all housing credit contracts reached 3.162 percent in August, up 2.7 basis points on July. A basis point is one hundredth of a percentage point, so this is a small monthly move on top of a slow climb.

The average monthly instalment settled at 418 euros, four euros more than in July and 24 euros more than in August 2025. Of that 418 euros, exactly half is interest: 209 euros goes to the bank as the cost of the loan, and 209 euros pays down the debt. That fifty-fifty split is a threshold the series has been approaching all year. It stood at 49.5 percent in the July reading.

The average capital still owed on a Portuguese mortgage rose by 725 euros to 80,188 euros. That figure is low because it averages across every loan in force, including the ones signed twenty years ago that are nearly paid off.

The picture for recent borrowers is different in every respect. On contracts signed in the last three months, meaning May to July 2026, the average outstanding capital is 185,812 euros, up 3,336 euros on the July reading, and the average instalment is 744 euros, up 13 euros in a month and 14.3 percent in a year.

The part that did not move

Here is the detail worth pausing on. The rate on the whole book went up. The rate on contracts signed in the last three months did not: it held at 2.910 percent, precisely where it was in July. Narrowed to house purchase alone, which is the bulk of the market, the rate on recent contracts actually fell slightly, by half a basis point, to 2.897 percent.

So the average Portuguese borrower is paying more while the person signing today is not. The reason is the structural shift underneath.

Why the mixed rate won

A taxa mista (mixed rate) loan begins with a fixed-rate period, most commonly two years, and then converts to a variable rate tracking the Euribor. It is not a fixed-rate mortgage. It buys a defined stretch of certainty and then hands the borrower back to the market.

Portuguese households began moving towards it in the second half of 2023, when the European Central Bank was raising rates hard. At the end of that year, variable rate still accounted for roughly 78 percent of the stock and mixed rate for under 18 percent. The share has shifted every year since, and in July the mixed rate overtook the variable one for the first time. Fully fixed-rate loans remain a rounding error at 4.71 percent.

Among loans actually signed in July the transition is close to complete: 86 percent were mixed rate, 12 percent variable and 2 percent fixed. Half of the Euribor-indexed contracts track the six-month rate and 30 percent the twelve-month.

That is the mechanism behind the divergence in the INE numbers. A book where nearly nine in ten new loans open with a fixed period does not reprice when the Euribor moves. The older, variable half of the stock does, and the Euribor has been climbing since the summer, with oil prices doing much of the work.

What it means if you are borrowing here

Three things follow for anyone with a Portuguese mortgage or shopping for one.

First, if you are on a variable rate, you are now in the minority, and you are the part of the market that absorbs Euribor moves immediately. Your next revision date matters more than the headline rate.

Second, if you take a mixed-rate loan, the fixed stretch is short. A two-year initial period signed now runs out in late 2028, and what it converts to depends on the Euribor then and on the spread already written into your contract. The stability is real but it is temporary, and it is worth knowing the exact end date before you sign.

Third, none of this changes how much a bank will lend you. The Banco de Portugal cut the maximum debt-service ratio to 45 percent from 1 August, a limit on what share of your income can go to loan repayments, and it applies whichever rate type you pick. Household borrowing has been running ahead of the regulator's expectations regardless, with total household debt at a record 180 billion euros in the summer.

INE's figures are drawn from data supplied by the banks under protocol and reflect returns received up to 10 September. The next release, covering September, is due on 21 October.