At a time when the real estate market continues to adapt to new challenges — from inflation and interest rates to changes in buyer profiles — the mortgage sector is also going through a transitional phase. To understand the current dynamics and anticipate the next steps, idealista/news interviewed Sandra Ramos Dias, from the Development and Marketing Department at Novo Banco, who provides a realistic and in-depth overview of the sector.

The executive highlights that, although the drop in Euribor is contributing to an increase in demand for home loans, client behavior doesn’t always follow interest rate logic. Mortgage production has been growing, influenced by factors such as the return of foreigners to the Portuguese market and tax incentives aimed at young people. However, Sandra Ramos Dias emphasizes that these measures — such as IMT exemption and public guarantees — must be analyzed with caution, as they do not always reach those who need them most.

The conversation — which took place before the sale of Novo Banco by Lone Star to the French group BPCE was made public — also focused on the most sought-after mortgage solutions. The highlight goes to the mixed rate, especially when combined with the bank's cashback campaign, which returns up to 2% of the contracted amount to customers — an offer that has seen great success. Still, the executive admits that Portuguese clients continue to prefer variable rates, a trend that could be reinforced if Euribor continues to decline in the coming months.

Another central topic of the interview was the growing role of credit intermediaries, who currently represent a significant portion of loan production in the banking sector. For Sandra Ramos Dias, these professionals are fundamental in combating financial illiteracy, simplifying the contracting process, and ensuring closer relationships with customers. And even amid geopolitical and economic instability, the outlook remains confident: the market adapts, banks adjust, and customers continue to seek solutions to achieve the dream of homeownership.

How do you assess the evolution of the mortgage market in recent years?

The mortgage market behaves in a very interesting way. Obviously, it has been growing — that’s no secret. Banks are issuing more home loans. There is some influence from the drop in rates, in Euribor, and also from the spreads that banks have been offering.

But in the past, we’ve seen curious situations: even when rates were high, there was still a lot of mortgage lending. So, the evolution of loan production in banks is not always directly linked to interest rate changes — which is an interesting aspect of this product.

What we’re seeing now is an increase in production, yes, but we believe there is a tendency to stabilize, following the stabilization of rates. House sales have also increased, sometimes due to external factors such as the rise in demand from foreigners.

At Novo Banco, we have an offering very much targeted at foreigners, with the same conditions as national clients. This has made foreign clients a significant share of our portfolio. We are probably one of the banks with the highest percentage of foreign clients, especially since we have the capability to analyze international income — which is not easy, for example, in the case of Brazilians or Americans with very extensive documentation.

The evolution of loan production is not always directly tied to the evolution of rates, which is an interesting feature of this product.

We also came from a phase where we were doing little mortgage lending. We wanted to gain weight and market share. That, combined with the drop in Euribor and the arrival of new clients — whether immigrants or investors with golden visas — contributed to increased mortgage production.

IMT exemption and public guarantees have been boosting mortgage lending for young people up to age 35. Have you seen this trend?

Yes, clearly. And not only that. The tax burden on mortgages was high, and that benefit has helped young people.

In addition, some banks — including ours — have also internally removed fees. That is, young people benefit from the state guarantee, initial tax exemption, and the banks’ efforts to make credit more accessible.

I think it’s also important to think about the middle class, which today, with their current income, faces great difficulty in buying a home and maintaining their debt payments.

What are currently your most attractive mortgage offers — mixed, variable, or fixed rate?

The mixed rate has seen significant evolution and growth. It is what most banks have been offering.

It has the advantage of giving clients some predictability for a period. However, Portugal continues to be a variable-rate country. We are starting to see a trend back to variable rates as Euribor drops.

Portuguese people don’t really like fixed rates. And even when we internally discuss the best time to fix rates, there’s never a certainty. We almost always end up choosing mixed rates.

I think it’s also important to think about the middle class, which today, with their current income, faces great difficulty in buying a home and maintaining their debt payments.

Our bet is on rates with fixed periods of two or five years. The most commonly used Euribor is the 12-month rate, which is essentially a mixed rate: 12 months of fixed payments and then it becomes variable.

Mortgage credit is becoming more and more similar from bank to bank. We look for something that differentiates us and brings value to the consumer.

We have an offer for everyone — young people, foreigners, clients over 50 years old. I’d say Novo Banco has the most complete offering on the market. And that’s especially relevant in an aging society.

For those over 50, we offer attractive conditions and some flexibility on life insurance. From the age of 65, we waive the life insurance requirement and allow loans up to age 80, which reduces the monthly payment and helps a lot.

Portuguese people don’t really like fixed rates. And even when we internally discuss the best time to fix rates, there’s never a certainty. We almost always end up choosing mixed rates.

Our flagship offer right now is the mixed rate with cashback: we return 1% of the loan amount to the client if they choose a fixed rate for two years, and 2% if it’s for five years — with no upper limit. That refund applies to €100,000 or €1 million. It’s been a huge success.

Have you been improving and diversifying your offer as Euribor falls?

We constantly study Euribor. When we believe the variable rate should be promoted more than the mixed rate, we will do so.

At the moment, with the mixed rate offering initial predictability and direct advantages like cashback, it remains the most attractive option. But we are alert and ready to adjust our offer.

How do you assess the role of credit intermediaries?

Credit intermediation is increasingly important. There are banks where 70% of production comes through intermediaries. In our case, we don’t see them as external — they are almost part of the bank.

Since the 2017 legislation, we’ve been working in a more structured way with these partners, who were previously real estate agents. Their weight is so significant that we provide both internal and external training for these intermediaries.

Our flagship offer right now is the mixed rate with cashback: we return 1% of the loan amount to the client if they choose a fixed rate for two years, and 2% if it’s for five years — with no upper limit. That refund applies to €100,000 or €1 million. It’s been a huge success.

They are the main promoters of our offers — whether for young people, those over 50, or cashback rates. They are very engaged and help us reach more clients.

What is the added value of the intermediary for the client?

The credit intermediary emerged to protect the consumer. They help simplify and translate banking language. In Portugal, there is significant financial illiteracy. Many people talk about effort rates or spreads without truly understanding the impact on their lives.

And more: the intermediary is paid by the bank, not by the client, which ensures impartiality. Banks pay very similar amounts, which prevents intermediaries from favoring one bank for personal gain.

Credit intermediation is increasingly important. There are banks where 70% of production comes through intermediaries. In our case, we don’t see them as external — they are almost part of the bank.

Moreover, in regions without bank coverage, the intermediary can provide full support to the client. And some people are afraid to enter a bank — we tried to solve that by redesigning branches to make them welcoming, like people’s homes. The intermediary helps overcome that fear. They accompany the client to the bank and make the process smoother.

With increasing regulation and ever more demanding documentation, this support is crucial.

How do you anticipate the evolution of Euribor by the end of the year? And next year?

No crystal ball, but we believe Euribor will continue to drop a bit. It’s likely to stabilize slightly below 2%.

If that happens, variable rates may become more appealing. Of course, everything depends on inflation and market developments, as we are a small economy very exposed to external factors.

What is your view on the evolution of ECB benchmark rates in the coming months?

We expect a moderate decline. But we are living in highly uncertain times — inflation, international politics, ECB decisions — everything has an impact.

We believe there could still be growth in mortgage lending and home sales, although it will be more moderate. We’ve noticed an increase in building permits, which may bring more new housing to the market.

How can foreign policy influence the financial market and monetary policy?

We thought the big challenge would be digital transformation, but we were surprised by wars like the one in Ukraine.

This instability has a direct impact: inflation, rising rates, investor withdrawal, and reduced financing.

We are living in highly uncertain times — inflation, international politics, ECB decisions — everything has an impact. But we believe there could still be growth in mortgage lending and home sales, although it will be more moderate.

The real estate market immediately feels these impacts — whether from bank or developer pullback or buyers postponing decisions.

Even so, I believe the market adapts. We will continue to offer credit, clients will continue to need homes, and the bank will continue to adjust. I see the future with optimism.