Banks stepped up the monitoring of mortgage borrowers throughout 2025, increasing the number of cases opened to identify situations of potential default.

Banks stepped up the monitoring of mortgage borrowers throughout 2025, increasing the number of cases opened to identify situations of potential default. According to the latest Credit Markets Monitoring Report published by the Bank of Portugal, 801,780 cases were opened under the Action Plan for Default Risk (PARI), equivalent to an average of around 67,000 cases per month, covering loan agreements with a combined outstanding debt of close to €20 billion. Compared with 2024, the number of cases increased by around 9%, a trend the regulator attributes to enhanced early identification of customers at risk of financial difficulties, as well as borrowers who alerted their banks to problems in meeting their mortgage repayments.

Despite the increase in preventive measures, the Bank of Portugal found that more than 60% of the cases were ultimately closed after no risk of default was identified. Of the remaining cases, only 0.1% resulted in an agreement to renegotiate the terms of the credit contract, while around 230,000 cases ended without any agreement between the financial institution and the customer.

By contrast, the number of cases opened due to actual default fell again in 2025. The monthly average declined from 8,165 cases in 2024 to 7,846 last year. The Bank of Portugal also highlights that, in most instances, arrears are resolved through the payment of overdue amounts, noting that “the regularisation of default situations occurs predominantly through the payment of overdue amounts, highlighting the decisive role of the customer’s behaviour in resolving them.”

Original Story: Executive Digest | Author: Pedro Zagacho Gonçalves
Edition and translation: Prime Yield