The latest study by Best Brokers, an international brokerage firm, shows the real interest rates on home loans for 62 countries around the world in the third quarter of 2024. And this indicator – which subtracts inflation from the interest rate on home loans – reflects the “real cost of the loan for the borrower and the real income for the lender”, they explain in this publication.

“Eight of the 62 countries we analysed have negative real rates. This does not suggest that homebuyers are not paying interest on their mortgages. But it does show that the real (versus nominal) cost of borrowing may have fallen,” they conclude. This was the case in Argentina (-175.89%), Turkey (-10.84%), Sweden (-1.21%), Japan (-0.85%), Belgium (-0.52%), Malta (-0.44%), Bulgaria (-0.21%) and Bosnia (-0.18%).

On the other hand, even after accounting for inflation, there are several countries in the world that have real interest rates on housing loans above 6%. “Real interest rates on mortgages in 2024 are likely to be higher in developing economies,” they conclude in the study. Russia is the country with the highest borrowing costs (12.30%), followed by the Dominican Republic (9.55%), Georgia (8.30%), Mexico (7.48%) and Costa Rica (7.42%). Despite being a world power, the US has a real home loan cost of 3.98%.

Looking at the European map, the same analysis reveals that, right after Russia, Latvia has the highest real interest rates (6.65%), followed by Poland (5.10%), Moldova (3.90%) and Lithuania (3.56%). All other European countries have home loan costs below 3%.

In the middle of the list, still with “reasonably low” real home loan rates, are Luxembourg (1.78%), the United Kingdom (1.77%), Greece (1.62%), Denmark (1.55%) and Portugal (1.50%). The countries with the lowest positive real interest rates are Croatia (0.59%), Spain (0.64%), and Switzerland (0.66%).

This means, in the Portuguese case, that the real cost of housing credit (1.5%) is much lower than the interest rates currently charged in the country, which include inflation (above 3.5%, according to the Bank of Portugal).