Families will receive financial support for their home loans due to Euribor rates, with the operationalization and calculation of interest rate bonuses for housing credits being carried out by banks, according to Portuguese Finance Minister Fernando Medina. The money will be credited to the accounts of eligible clients, with the terms of the relationship between the State and the banks to be regulated in a protocol to be formalized in the next two weeks. The support aims to alleviate the difficulties faced by families due to the rapid variation of Euribor rates, with eligible families having incomes up to the 6th income tax bracket, a debt-to-income ratio above 35%, and a credit amount of up to 250,000 euros. The support will be paid from January to December, with a possible extension to be reevaluated at the end of the year.

The Portuguese Minister of Finance, Fernando Medina, announced on Thursday that banks will be responsible for operationalizing and calculating the interest bonus for housing loans. The money will then be credited to customers’ accounts. The measure is part of the More Housing program approved by the Council of Ministers in Lisbon. The aim is to alleviate the difficulties faced by families due to the rapid variation of Euribor rates. Families with incomes up to the 6th bracket of the IRS, whose loan burden exceeds 35% and with a contracted credit amount up to €250,000, are eligible for the support.

Automatic Process with Minimal Inconvenience

According to Medina, the financial institutions will calculate the amount and credit it monthly to eligible customers. The terms of the relationship between the State and the banks will be regulated in a protocol to be formalized in the next two weeks. The objective is to develop the process automatically with minimal inconvenience for those who have a housing loan.

New ECB Rates Reinforce the Need for Support

Prime Minister António Costa emphasized that the recent decision by the European Central Bank to raise the benchmark interest rates by 0.5 points reinforces the need for the measure. The support aims to offset the differential between the benchmark index and the contracted rate that exceeds 3%. The rise in interest rates by the ECB will impact housing loans, making this measure more relevant than ever.

Support to Be Paid from January to December

The support will be paid from January to December, and the need for its continuation will be reassessed at the end of the year. The More Housing program’s initial version was approved by the Council of Ministers on February 16th and was subject to public consultation. The part that depends only on government approval was approved on Thursday, while the part that requires legislation by the Assembly of the Republic (such as fiscal matters) will undergo public consultation until March 24th. The approval of the respective proposal is expected to take place in the Council of Ministers on March 30th.