Rate cuts may be closer than expected in the past semester.

Want to end your current variable rate mortgage so that you are no longer hostage to interest rates? Talk to Poupança no Minuto and find out how you can do it! But first, read the latest forecast on interest rates.

Interest rates: Centeno indicates they will decrease earlier than expected.

The Governor of the Bank of Portugal (BdP), Mário Centeno, mentioned in statements that the interest rate cut will happen after this period of pause, but it is still too early to know the exact moment when it will occur.

However, it refers that this cut may be closer than the forecast made six or nine months ago.

"It seems clear, highly probable, that the next move after this state of rate pause will be a reduction. When it will happen is still uncertain (...) this moment will come sooner than we might have thought six or nine months ago," Centeno explains in statements to SIC Notícias."

Even though this cut will only come later, some families have already begun to feel a slight relief in their mortgage payment.  

As is the case of home loan borrowers with variable rate indexed to the three and six-month Euribor. According to simulations from DECO PROteste shared by Notícias ao Minuto, "there are decreases of 4.32 euros in contracts with Euribor at six months and 3.93 euros in those with Euribor at three months, in a scenario of financing 150 thousand euros over 30 years with a 1% spread. However, in the case of the 12-month Euribor, the installments are still expected to increase by about 24 euros."

The Euribor rates in various maturities continue to remain below 4%, with data from BdP comparing to November 2023 showing that the 12-month Euribor represented 37.4% of variable rate permanent home loan contracts, the 6-month Euribor 36.1%, and the 3-month Euribor 23.9%.  

While the rate cut doesn't arrive...cut your own payment.

While interest rates do not decrease, there are other ways for you to cut down on your monthly mortgage payment - in case you have a variable rate mortgage tied to Euribor.

Don't settle for slight reductions in your performance when you can achieve a more significant cut... there are options that give you a more immediate monthly saving.

As is the case of renegotiating the current conditions of your contract with your bank, or (currently most common) transferring the contract to a new entity, accessing more favorable conditions with fixed and mixed interest rates.

To better understand the impact, there are banks promoting mixed rates starting from 2.50% (compared to the current near 4% values of the Euribor rates) if you fix the rate for 1 year - the expected time for interest rates to start dropping - then returning to the variable rate.  

If this is a viable option for you, contact a credit intermediary from Poupança no Minuto who will quickly present you with different proposals from banks with this regime, through a cost-free service. We assist in every step of this process, all to help you save, minute by minute, with your home loan!