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Fixing housing loan installments in times of crisis: Yes or No?

The crisis has knocked on the doors of many families, who have seen their housing loan installments skyrocket – those whose loans are indexed to variable Euribor rates – since the middle of last year. The Government, in order to mitigate this scenario, gave the green light to the possibility of fixing the house payments for two years. Adhering to this measure implies, however, that more interest will be paid at the end of the loan. So, is it worth fixing the mortgage loan installment?

The weekly Deco Alerta section is provided by Deco – Portuguese Association for Consumer Protection and is aimed at all consumers in Portugal.

We are going through a difficult period because, recently, my wife became unemployed. What we earn is no longer enough to cover all expenses, especially with the rise in mortgage payments. Should we follow the path of setting our monthly payment? Can you help us?

On November 2, 2023, the measure came into force that allows Portuguese holders of housing loans, with variable rates, to fix the installment of the home loan for two years. This is a Government response to the rapid increase in reference indexes that serve as the basis for calculating interest on variable rate housing loans, to ensure greater predictability for families regarding the management of their budget.

Although you haven't mentioned it, we assume that your loan has a variable rate, so you can request a review of the installment, fixing its value, which results from calculating 70% of the value of the reference interest rate, in this case Euribor. to six months, plus the value of the contracted spread.

How do I ask for the mortgage installment to be fixed?

You must make the request to fix the installment with your bank or through its digital channels by March 31, 2024.

After your request, banks have 15 days to respond, including simulations of the installment due and the installment with part of the deferred amount, the amount to be paid later and the repayment plan for the amount to be deferred. After this information, you will have 30 days to inform the bank whether or not you want the installment to be fixed.

Attention: the difference determined will always be paid by you or your family. This amount will be added to the outstanding capital and will be paid from the fourth year after the end of the fixation.

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Source: Idealista


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