Medidas de mitigação do impacto do aumento das taxas de juro no crédito à habitação

A set of measures is in place until 31 December 2023 to mitigate the effects of the rise in interest rates on variable rate loans for the purchase or construction of permanent residential property with an outstanding value of €300,000 or less.

Such measures require credit institutions to:

Assess the impact of the interest rate increase on customers’ debt service to income ratio (DSTI); and
Propose the renegotiation of credit agreements, (i) if they find that there is a significant worsening of the DSTI or a significant DSTI or (ii) if they are warned by the customer about facts indicating a deterioration in the customer’s creditworthiness and confirming the existence of a risk of arrears.

Measures to facilitate the early repayment of credit agreements will also be in place until 31 December 2023, including:

The temporary suspension of fees for early repayment, whether in part or in full, of variable rate loans for the purchase of permanent residential property, irrespective of the amount outstanding;
The possibility of early redemption of savings plans without penalty.

Assessment of the impact of the interest rate rise on customers’ debt service to income ratio (DSTI)

Institutions are required to assess the impact of the interest rate rise on the DSTI of customers within 45 days after the entry into force of these measures and thereafter at least 60 days before each date the contractual interest rate is scheduled to be set.

The DSTI is the proportion of the customers’ income earmarked to pay all their financial commitments, such as home loans or consumer credit.

Monitoring developments in the DSTI should enable institutions to identify customers whose DSTI has risen to 50% (‘significant DSTI’) and also customers who have a ‘significant worsening of the DSTI’, i.e. situations where customers’ debt service to income ratio:

reached 36%, as a result of:
- An increase of 5 percentage points from the DSTI they had 12 months before; or
- An increase of 5 percentage points from the DSTI they had at the time the credit agreement was signed, if the agreement was signed fewer than 12 months before; or
- An increase of 3 percentage points or more of the reference index (Euribor) relative to the date of conclusion of the agreement (assuming that the home loan agreement was concluded with a repayment term of more than ten years).
has in the meantime recorded – although it was already over 36% 12 months before –:
- An increase of 5 percentage points from the DSTI they had 12 months before; or
- An increase of 5 percentage points from the DSTI they had at the time the credit agreement was signed, if the agreement was signed fewer than 12 months before; or
- An increase of 3 percentage points or more of the reference index (Euribor) relative to the date of conclusion of the agreement (assuming that the home loan agreement was concluded with a repayment term of more than ten years).

The institution may ask the customer for information and documents to assess their creditworthiness, such as proof of income. The customer must provide the requested data within ten days.

Renegotiation of the credit agreement

The institution is required to implement the procedures set out in the Pre-Arrears Action Plan (PRAP) if:

It finds a significant worsening of the DSTI or a significant DSTI following the monitoring of the ratio;
It is warned by the customer about facts that indicate a deterioration of the customer’s creditworthiness.

In the application of PRAP, the institution must monitor the customer’s creditworthiness to assess whether there is actually a risk of arrears on the credit agreement.

If the risk of arrears is confirmed, and where institutions conclude that the bank customer is credit worthy, institutions should make proposals to renegotiate the loan. Such proposals must be submitted no later than 15 days after the customer provided the information and documents requested by the institution.

The proposals made by institutions may include one or more of the following changes to the terms and conditions of the loan agreement:

Extension of the repayment period;
A grace period for repayment of principal or repayment of principal and payment of interest (i.e. a period when the customer pays only the interest on the loan or when the customer does not pay the monthly instalment, which is deferred);
Deferral of part of the principal to a future instalment;
Reduction of the interest rate applicable to the agreement over a specific period of time.

Where the renegotiation of the agreement provides for the extension of the repayment period, bank customers may resume the period previously agreed. Customers wishing to do so should contact the institutions while the extension of the repayment period is in effect. Institutions are required to inform customers about the financial impact of resuming the original repayment period and to implement the customers’ request within ten days.

Institutions are required to inform customers once a year, for five years following the decision to extend the loan repayment period, of their right to resume the original repayment period.

Credit institutions may not charge fees nor rise the loan interest rate as a result of renegotiating the terms of the loan agreement. Customers are also exempt from payments to registry offices and notaries, particularly in relation to property registration.

Institutions may also propose the consolidation of several credit agreements or entering into a new credit agreement to refinance the debt of the existing credit agreement.

Customers are not obliged to accept the proposals made by institutions.

Temporary suspension of the fee for early repayment

From 26 November 2022 until 31 December 2023, customers are exempted from paying the partial or full early repayment fee on variable rate loans for the purchase or construction of permanent residential property, regardless of the amount outstanding.

If borrowers wish to repay only part of the debt (partial early repayment), they should do so on the date that coincides with the payment of the instalment and give the credit institutions at least seven working days’ notice that they will make such repayment.

Customers may also repay the outstanding amount of the loan in full at any time (full early repayment). In that case, they must give at least ten working days’ notice to the credit institution. If customers choose to exercise this right, institutions must issue a statement for mortgage extinction free of charge within 14 business days of the date of termination of the agreement.

Since no fees are charged, no taxes on such fees apply.

Penalty-free early redemption of savings plans

Until 31 December 2023, customers may redeem retirement, education and retirement/education savings plans early.

The amount of the early redemption is determined in accordance with the conditions applicable to each savings plan, up to the monthly limit of the Social Support Index (IAS). The value of the IAS in 2023 is set at €480.43.

The customer may use the funds redeemed from the savings plans under this temporary regime for any purpose, including the repayment of home loans.

Loans Home loans Arrears

CONSULT HERE ALL SERVICES

Medidas de mitigação do impacto do aumento das taxas de juro no crédito à habitação

Assessment of the impact of the interest rate rise on customers’ debt service to income ratio (DSTI)

Renegotiation of the credit agreement

Temporary suspension of the fee for early repayment

Penalty-free early redemption of savings plans