Why won't Subversion remember certificates?
This doesn't sound like a Terminal problem, but a subversion and/or permissions problem. Did it work at one point in the past, or has it always been a problem?

Most likely the issue is somewhere inside of ~/.subversion/auth/. You could try blowing away the directory, though that will require you to recreate all your credentials. (Maybe something in there is borking up authentication process.)

I suggest you try to recreate your problem with another user profile, computer, or operating system, and compare ~/.subversion directories with your broken system.

If you are convinced its the Terminal's fault, you can try iTerm2, though I expect the same results in the same environment. Good luck!