Deco wants to put an end to early credit repayment commissions

Deco wants to put an end to the early repayment commission on housing loans, which would once and for all clarify some of the temporary measures adopted by the government to support families with home loans, in a scenario of inflation and rising interest rates. For the Consumer Protection Association, this step is necessary to encourage savings among families.

As part of World Consumer Rights Day, Dico presented a set of 45 measures to the parties that he believes should be followed in the next legislature, covering sectors such as telecommunications, energy and water, but also the financial sector.

“The increase in interest rates had a direct impact on housing credit contracts and created a kind of domino effect in the lives of consumers,” Paulo Fonseca, coordinator of the legal and economic department at Deco, tells Jornale Economico. It represents a large “slice” of families' monthly budget.

To overcome this impact, António Costa's government adopted a set of measures, namely the suspension of the commission for early repayment of housing loans, a support that ended up being extended until the end of this year. Early repayments on housing loans rose from €5.5 billion in 2022 to €10.1 billion in 2023, nearly doubling between the two periods.

But Dico wants the new executive to go further, by making this measure final, canceling early consumption commissions in the variable rate system and reducing their value to 0.5% in the fixed rate system, compared to the current 2%. “What we are asking for is nothing more than to define what is fleeting,” says Paulo Fonseca.

“If we encourage consumers to pay more attention to saving, we cannot allow them to pay for their ability to achieve these savings,” stresses the coordinator of the Legal and Economic Department at Deco, noting that this also ends up being a “disincentive for the consumer.” Mobility when they want to transfer their mortgage loan to another bank that offers better terms and they have to pay this commission.

The Consumer Protection Association also wants to resume the possibility of deducting interest on personal and permanent housing loans for all loans and restore the 30% limit. “The government allocated a kind of compensation that ended up reducing the withholding tax to protect families' situations on a monthly basis, but we are talking about the withholding tax that will be reflected this year in the IRS that is being introduced. Consumers who will get more will get less,” he says. “Those who didn’t pay will probably have to pay, as there ends up being no direct impact on taxes.”

On the other hand, Deco warns that a list or database of IBAN and Multibanco references used in fraud must be created through a central registry, which is a cross-sector problem. “Fraud has led to an increase in complaints received by Deco,” says the person in charge.

He adds that these measures “are already being discussed in Brussels to some extent.” It is necessary to distribute responsibility to everyone, not just consumers, to bear it,” which means that “banks must bear greater responsibility in situations where consumers are victims of fraud or fraud.”