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);
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 early repayment fees, whether in part or in full, on variable rate loans for the purchase of permanent residential property, irrespective of the amount outstanding;
the possibility of the 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 customers’ DSTI of 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 previously; 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 previously; 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 previously –:
- an increase of 5 percentage points from the DSTI they had 12 months previously; 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 previously; 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 after monitoring the ratio;
it is warned by the customer about facts that indicate a deterioration in the customer’s creditworthiness.

When applying the PRAP, the institution must monitor the customer’s creditworthiness to assess whether there is an actual risk of arrears on the credit agreement.

If the risk of arrears is confirmed, and where institutions conclude that the bank customer is creditworthy, 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 (which is not subject to the loan maturity restrictions set out in the Banco de Portugal’s Macroprudential Recommendation);
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.

Institutions may not make the renegotiation of home loan and mortgage credit agreements conditional on the purchase of other financial products or services, even on an optional basis.

Where the repayment period of the credit agreement is extended, bank customers are entitled to resume the previously agreed period. To this end, they must contact the institutions while the extension of the repayment period is in force.

After being contacted by the customer, institutions must (i) present a proposal for an adjusted repayment schedule illustrating the financial impact of that resumption, and (ii) inform bank customers about the procedures to be followed to exercise that right. After receiving this information, customers have ten days to exercise their right to resume the previously agreed repayment period. Institutions must do so within ten days of receiving the customer’s request.

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, more specifically, in a bank statement, conforming to the good practices promoted by the Portuguese Banking Association (Associação Portuguesa de Bancos – APB).

Credit institutions may not charge fees nor raise 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 interest relief

Up to 31 December 2023, customers with loans for the purchase of permanent residence may benefit from extraordinary support in the form of interest relief.

To access this extraordinary support, customers must comply with a set of requirements and request the respective institution for access to that relief.

Scope

The temporary interest relief scheme applies to credit agreements for the purchase, refurbishing or construction of permanent residence which:

has been concluded by 15 March 2023;
has a principal amount of €250 thousand or less;
has a variable interest rate or, in the case of credit agreements at a mixed interest rate, are in a variable interest rate period;
has not missed any instalments;
having been concluded before 2018, or with an initial repayment period of less than ten years, their Euribor-linked change has been at least 3% of the value prevailing at the time the agreement was concluded.

Temporary interest relief applies where the index of the credit agreement is 3% or more.

The relief based on the difference between the value of the index contractually fixed and:

the 3% threshold; or
the threshold considered for the purpose of assessing the customer’s creditworthiness, if it was above 3%.

Where the borrower’s debt-to-income ratio is significant, the relief is always calculated on the basis of the 3% threshold.

Access requirements

To access this extraordinary support, customers must comply with the following requirements:

have their tax domicile in Portugal;
earn an annual income equal to or below the sixth bracket in the Personal Income Tax Code scale, in force on the date on which the support is granted, with reference to their last annual personal income tax return, or, where higher, showing that they have experienced a loss in income of more than 20% placing them in the sixth income bracket or lower;
earn a total monthly income not exceeding the amount corresponding to 1/14 of the ceiling for the sixth bracket in the personal income tax scale in force on the date on which the support is granted, for customers who are not obliged to file their income tax return and who have monthly labour income declared to Social Security or receive social benefits;
have no financial wealth (covering, inter alia, deposits, financial instruments, capitalisation insurance or savings certificates or Treasury certificates) with a total value of more than €29,786.66 (62 times the Social Support Index);
have a debt-to-income ratio of 35% or more of their annual income due to the value of instalments under the credit agreement for house purchase.

If the credit agreement for house purchase has more than one borrower, the eligibility requirements must be fulfilled by all borrowers.

Relief granted

The relief shall consist of:

75% of the calculated value, where the customer has an annual income equal to or lower than the ceiling of the fourth bracket in the personal income tax scale; or
50% of the calculated value, where the customer has an annual income higher than the ceiling of the fourth bracket and equal to or lower than the ceiling of the sixth bracket in the personal income tax scale.

The relief will have the maximum annual value per credit agreement of 1.5 times the Social Support Index, i.e. €720,64.

The amount equivalent to the tax deduction resulting from the payment of interest shall be deducted from the support granted under this scheme with reference to the last available tax period.

The first payment of the relief includes the amount for the preceding months, starting from the month in 2023 in which the eligibility requirements are met.

Access request

Customers who meet the access requirements may submit an application to their institution for access to relief, providing the following information:

their latest income tax return or the latest income tax notice of assessment or, in the case of customers exempt from submitting an income tax return, any document proving that they have an annual income equal to or lower than the ceiling of the sixth bracket of personal income tax scale or, where higher, showing that they have experienced a loss in income of more than 20% placing them up to the ceiling of the sixth bracket;
up-to-date information on income for customers experiencing a loss in income of more than 20% up to the ceiling of the sixth income bracket;
up-to-date information on their financial wealth.

The institution may request any information or documents deemed necessary and appropriate to verify the borrower’s debt-to-income ratio. They can also consult the most up-to-date information available at the Central Credit Register. Customers must provide the information and documents requested by the institution within ten days.

The institution must inform the customer, within ten working days of receiving the complete application, whether they comply with the requirements for access to the relief. The relief must be applied starting from the instalment immediately following that communication.

Institutions may not charge fees or other charges to process the relief and must inform customers every month by durable medium, namely by means of a statement, of the amount of relief granted.

Temporary suspension of the early repayment fee

From 26 November 2022 until 31 December 2023, customers are exempt from paying a 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 a 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 their retirement, education and retirement/education savings plans early, without penalty, up to the monthly limit of the social support index value.

For 2023, the value of the Social Support Index is set at €480.43. Such a redemption may take place without the need to comply with a lock-in period of at least five years, provided that it covers amounts subscribed until 30 September 2022.

Penalty-free partial or total redemption of the savings plans is also possible, without the need to comply with a lock-in period of at least five years and without value limits, in the following situations:

for instalments of credit agreements secured by mortgages on the customer’s own and permanent residence;
for credit instalments for the construction or improvement of own and permanent residence;
for delivery to housing cooperatives in permanent owner-occupied housing solutions.

Customers requesting early redemption up to the monthly amount of the Social Support Index may also request to repay instalments of credit agreements secured by mortgages on their own permanent residence, to pay credit instalments for the construction or improvement of own and permanent residence and to deliver to housing cooperatives in permanent owner-occupied housing solutions, insofar as they are exceptional cumulative application schemes.

Customers may also redeem their savings plans early without a penalty, for the early repayment of credit agreements for own and permanent residence, up to an annual limit of 12 times the social support index.

This exceptional regime does not preclude redemption of the total or partial value of the savings plans under situations already laid down by law.

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