Residential credit. The measure to reduce the rate of effort will benefit only a few families

It’s the promised measure to mitigate the impact of higher interest rates on home loans: the government will go ahead with a diploma obligating banks to renegotiate the terms of housing credit when the effort rate reaches 40% of the household budget and is compounded by 5%. point last year.

This effort rate value represents the segment of the family budget that is used to pay all of the family’s credits, whether it’s a home loan or other personal credits, for example.

The news provided by the newspaper “Negócios”, and confirmed by the RTP, says that for the most serious cases up to a 50% effort rate, the renegotiation with the bank should be immediate without the need to accrue with the criterion increase of 5 percentage points in the last year.

The initiative can come from the customer, but the bank must have mechanisms in place to detect these situations and commit to providing solutions within 15 days.

The Bank may propose a change in the spread, the indexed interest rate or the maturities, but without exceeding the limits set forth in the recommendations of the Bank of Portugal.

According to data from the Bank of Portugal, one million households have mortgages. The average voltage rating is 17%.

90% of mortgages have less than 27% of the effort rate, which means that if there are problems, less than 10% of households will pay for their home to the bank.

Taking into account the values ​​of Euribor at 3, 6 and 12 months and projected for July 2023, Banco de Portugal accounts for an average increase of €100 in home premiums within a year.

This can increase the effort rate to 23% – still far from the 40% that should be included in a government diploma.

Where there may be more problems among young people, who bought a home less time ago, have higher loan amounts and still have many years of debt.

But even for those up to the age of 30, the effort rate is currently 19%, according to the Bank of Portugal. Higher interest rates can increase the effort rate up to 28%.

It is therefore a political measure that serves more as a safety net and should, in practice, be applied to a small number of families.

The goal is to activate all the alarms, in families and in banks, so that everyone is there and working as quickly as possible so that there are no bigger problems.