Difficulty in paying home increases: How to lower loan installment?
The difficulty in paying for housing by the Portuguese has increased with the context of rising interest rates and inflation that we are going through. In times like these, find out how to lower the installment of your mortgage.
Downloading the installment of your housing credit is easier with the credit intermediaries from Poupança no Minuto... talk to us to simulate your case. Or first understand the data analyzed about the difficulty of paying housing expenses, then.
Six out of ten Portuguese people have difficulty paying their homes.
According to Notícias ao Minuto, a barometer from the Francisco Manuel dos Santos Foundation found that currently,
The barometer in question - on Housing - included 1,086 people, with a representative sample of the Portuguese population, and aimed to analyze the housing crisis in Portugal for "more and better data on the conditions in which families live, the needs and difficulties they face, and their perceptions and convictions," as can be read in the news.
According to a note from FFMS, cited by Lusa in Notícias ao Minuto, "the surveyed population has been living in their current housing for an average of 20 years and, in terms of housing occupancy, the majority live in their own homes (66.4%), with 31.2% of them having a mortgage".
Regarding the monthly average costs of respondents, with their housing loans or rent, "despite strong regional differences, households with costs (51%) spend, on average, 573 euros per month fixed on the loan or rent".
The report in question concludes that 62% of households feel some difficulty in paying their monthly housing expenses, meaning six out of ten people, and 13% feel a great difficulty.
However, about 80% of respondents are satisfied with their homes, but two thirds admit needing urgent repairs or improvements on their property.
It was also found that one in nine of those surveyed fears "being at risk of losing their home in the next five years, due to increased rent or mortgage payments (50%) or at the landlord's initiative (28%)".
Faced with the consequences that arise from this difficulty, one in four respondents state that "access to housing has already conditioned life decisions," with an average of two life decisions conditioned. The decisions in question include difficulties in changing residence (34.9%), moving out of parents' house (31.5%), and moving in with a partner (25.7%).
How to download the credit installment?
There are several ways to reduce your monthly mortgage payment. In addition to checking if you are eligible to join the Government's housing support measures, you have options such as renegotiating conditions, transferring the loan to another bank, or transferring the associated insurances to another insurer.
Let's first review the measures currently in force:
- Fix and reduce the monthly installment: Until the end of March 2024, if you have a variable rate housing loan (or mixed with a variable period) signed before March 15, with a remaining term of five years or more, you can fix the installment at a value resulting from the application of 70% of the 6-month Euribor. However, note that in this case you will have to repay the differential amount four years later, spread out over the remaining term of the contract;
- Temporary interest bonus: Bonus calculated on the value of the benchmark above 3%, if it has earnings up to the 6th bracket, being applied at 100% when the effort rate is equal to or greater than 50%, and at 75% when the effort rate is between 35% and 50%, with an annual bonus value of up to 800 euros.
If you want to have access to a permanent lower monthly installment, without having to return the amount later or limiting conditions, you may consider other options. The first step is to communicate to your bank that you are dissatisfied with the current credit conditions, so they can start by reviewing the contract and renegotiating. Click here for more information.
If, after renegotiating the conditions, you remain dissatisfied: Look for the conditions you need at other banks. It is possible to transfer your credit to another bank. In this case, you will notice significant savings if you currently have a mortgage with a variable rate indexed to Euribor.
Currently, there are banks practicing fixed and mixed rates (starting at 3%) at lower values than Euribor (around 4%), besides offering more security and stability.
In addition, you may also consider transferring your life insurance associated with the credit: If you have insurance contracted with the bank's partner insurer, by transferring it you may have access to better conditions and a lower value. What may happen is the bank increasing your spread value, but often the amount saved on the insurance installment is much more significant compared to the increase in spread penalty.
To analyze your specific case, hire a credit intermediary/insurance mediator. At Poupança no Minuto, we provide both services for free, quickly, and personalized. Contact us to help you lower your installments!