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Mortgage credit. Energy bill can count in home effort rate weighting

When making home loans, banks can start to factor in home energy costs. This means that, when taking out a loan to buy a house, electricity and gas bills can be taken into account when evaluating the effort rate.

Luís Laginha de Sousa, director of the Bank of Portugal, says that “there will be no recommendation for the moment.” However, he explains to Correio da Manhã that “the book on these issues is still being written”, and “later, it is an issue that must be taken into account”.

The recently presented Financial Stability Report (REF) refers to a household spending survey from 7 years ago. “In 2015, the average annual energy bill per home in a home (expenditure on electricity, gas and other fuels) was 1,222 euros,” the document reveals.

The report also details that energy spending on total family income represents an average of 10.3%. However, for families with income below the average value (700 to 1,200 euros per month) the percentage rises to 14.7%.

“Expenditure on electricity and gas represented 60% and 34% of household energy bills in Portugal, with the remaining 6% on liquid and solid fuels,” says the REF.

The diploma approved by the Government -published in Diário da República- obliges banks to renegotiate housing loans (own and permanent) that cannot exceed 300 thousand euros by the end of 2023. The credits must be indexed to the variable rate Euribor, provided that the effort rate exceeds 36%.

President of the Republic promulgates diploma with government measures to raise interest rates on mortgage loans

Source: Observadora

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