LISBON, March 31 (Reuters) - Mortgage lending in Portugal rose 8.7% in February from a year ago to 1.35 billion euros despite a sharp rise in interest rates on new loans due to monetary policy tightening by the European Central Bank, Bank of Portugal data showed on Friday.

The average interest rate on new mortgages soared to 3.52% in February from just 0.87% a year ago.

The ECB last raised its refinancing rate by 50 basis points to 3.50% two weeks ago.

In Portugal, around 90% of the stock of 1.4 million mortgages have variable rates indexed to six-month and 12-month Euribor rates.

The share of bad loans in Portuguese banks' loan portfolios fell to an all-time low of 3% in December, the central bank said on Thursday.

In a separate report, the Bank of Portugal said that in 2022 there was "an improvement in the risk profile of borrowers of new home loan operations, with a reduction in the percentage of credit granted to high-risk borrowers".

It said that in 2022 around 91% of new credit for housing and consumption was granted to borrowers with a debt service-to-income ratio less than or equal to 50%.

The percentage of residential real estate transactions financed by domestic credit remained stable between 2018 and 2022, at around 46%, significantly lower than the 76% in 2009-2010 at the start of Portugal's debt crisis that led to an international bailout and painful austerity.

($1 = 0.9205 euros) (Reporting by Sergio Goncalves; editing by Andrei Khalip and Giles Elgood)