Government moves forwards on least controversial measures of ‘Mais Habitação’ housing policy
Just as the ECB announces a new hike in interest rates, the Portuguese government has approved a measure obliging all banks offering home loans to offer a fixed rate tariff.
This way, borrowers who don’t want to be in constant fear of variable rates (which have increased exponentially as the ECB tries to get a handle on inflation) have an alternative.
The decision is to apply to all borrowers – even those currently on variable rate home loans. They are to be allowed to change to a fixed rate, explained the prime minister in a press conference this afternoon.
The ‘catch’ however is that fixed rate mortgages are invariably set ‘higher’ than variable rate loans. They will be, as the PM inferred, a form of ‘commercial offer’. The main advantage being that borrowers will be able to budget, knowing their costs will not vary.
This was one of the least controversial measures of the ‘Mais Habitação’ housing policy.
Another measure approved today was the ‘mortgage support scheme’, involving an interest rate subsidy to remain in force until the end of the year, and which “may be renewed if interest rates are not back down by then”.
The measure covers families with incomes up to and including the 6th IRS income bracket who find themselves spending 35% of their income on keeping a roof over their heads.
Says Lusa, it covers mortgages of up to €250,000, with support paid retroactively to January of this year, with a limit of €720 per year (€60 a month).
As Mr Costa explained, the support will vary according to families’ incomes.
Families with incomes up to and including the 4th IRS bracket will receive 75% support, and families in the 5th and 6th brackets will receive 50% support.
This percentage will take into account the difference between the Euribor rate contracted and the current rate.
“This support exists whenever there has been an increase of more than 3% in relation to the value of the index on the date of the signing of the contract”, and the support (of 50% or 75% depending on the case) will be applied over this difference, the prime minister added.
According to examples given by António Costa, a family in the 3rd IRS bracket, which has a home loan with Euribor at 0.25 and which currently has a rate of 3.7, will be entitled to monthly support of €61.
A family in the 6th income bracket that has contracted Euribor at a zero rate and is now at 4.5, then the support will be €88 per month.
According to the prime minister, the measure covers loans “contracted until yesterday (March 15)”.
Public consultation of the part of ‘Mais Habitação’ that provides support to tenants and people with housing credit ended on March 13.
Public consultation of the remaining programme, which includes the more controversial measures, like limitations on Alojamento Local/ the scrapping of Golden Visas and coercive leasing of vacant habitable properties, ends in one week’s time – at which point much of the content will them have to be discussed, and eventually voted on, in parliament.
As a result, no one can tell when the rest of ‘Mais Habitação’ will be approved, or otherwise.