OWNING YOUR own home is fast becoming as popular in Portugal as it is in the United Kingdom. According to statistics released by consumer group DECO, 60 per cent of young people, aged between 25 and 34, have a mortgage thanks to the lowest bank borrowing interest rates in living memory.
DECO surveyed 3,300 Portuguese between June and August 2004, as banks increasingly seek to capture young clients with new products at special rates. The general rule is that these cheap products are specifically designed for clients under 30, with the idea that, once a client joins a bank, he or she usually remains with the same bank for life.
Many banks are still offering mortgages at 100 per cent, knowing that most young people don’t have any savings put aside. They also offer longer periods to pay off the loan and even pay off or reduce the costs of the so-called ‘abertura’ or contract expenses.
Another ‘sweetener’ the banks are offering is for young mortgagees to only pay the interest, rather than the capital on their home loan, for the first few years.