Interest Again Takes More Than Half of the Average Portuguese Mortgage Payment After a Fourth Monthly Rise in the Rate, to 3.194 Percent

The average interest rate on Portuguese housing loans rose for a fourth month running in September, to 3.194 percent, and interest once again made up more than half of the typical monthly instalment. The figures come from the monthly release on implicit mortgage interest rates published on 21 October by the Instituto Nacional de Estatística (INE, Statistics Portugal).

The rate was 3.2 basis points higher than in August (a basis point is a hundredth of a percentage point). According to INE's data tables, it is the highest since September 2025, when it stood at 3.228 percent, and up from a low of 3.065 percent in May 2026.

What the average borrower pays

Across all housing loans, the average instalment was 423 euros in September: 5 euros more than in August and 30 euros more than in September 2025. Of that, 213 euros (50.4 percent) was interest and 210 euros (49.6 percent) went to paying down the loan. INE says interest had not taken more than half of the instalment since August 2025.

The average amount still owed rose by 655 euros in the month, to 80,843 euros. That figure covers every loan in force, including older loans that have already been partly repaid, which is why it sits far below the figures for new loans.

Newer loans are far larger

For contracts signed in the previous three months (June to August 2026, as INE counts them), the rate rose from 2.910 percent in August to 2.959 percent. The average instalment on those loans went up by 13 euros to 757 euros, 13.7 percent more than a year earlier, and the average amount owed was 187,246 euros, 1,434 euros more than in August.

For loans taken out to buy a home, the largest category, the rate on all contracts was 3.177 percent (up 2.9 basis points) and on recent contracts 2.945 percent (up 4.8 basis points).

Islands pay slightly higher rates

INE's regional tables show the rate at 3.187 percent on the mainland, 3.260 percent in the Azores and 3.288 percent in Madeira. Average instalments were 425 euros on the mainland, 416 euros in Madeira and 338 euros in the Azores, where loans are smaller on average (62,837 euros owed, against 81,306 euros on the mainland). In the Azores, interest and capital each made up 169 euros of the instalment.

What it means if your rate is variable

INE's implicit rate is the interest charged in the month divided by the capital owed at its start, expressed as an annual rate. It is an average over fixed, mixed and variable loans together, and INE does not publish a separate figure for variable-rate contracts. So it is a guide to the direction of travel rather than a forecast of your own bill: what you pay depends on your index, your spread and when your rate is next reset, all of which are set out in your loan contract.

If you are in that position, our report on October's instalment rises looks at this autumn's resets, and our piece on mixed-rate loans reaching the end of their fixed period covers the choice many borrowers now face.

INE's next release, covering October, is due on 19 November 2026.