Live / Increase in fees. Government must present measures to help families

The Government indicates that there has been some moderation in the Euribor rates in recent days, but does not rule out that there may be new measures in addition to this “large-scale” package. It is not known “what the future holds”.

João Nuno Mendes affirms that they worked with “the regulator, with the Bank of Portugal and naturally they consulted with the APB itself”.

“The diploma is the responsibility of the Government, there is no animosity but we believe that it is time to get down to work.”

Banks have 45 days to review effort levels and activate business processes when there is a risk of difficulties, João Nuno Mendes explained.

Questioned by journalists, Mariana Vieira da Silva confirms that there will be a new meeting to take stock of the situation of the Covid-19 pandemic.

“The Government has continued with the follow-up and is currently evaluating the appointment of a new meeting where the status of the evolution of the disease can be made,” says the minister. “In the next few days/hours there will be conditions to announce the date.”

João Nuno Mendes confirms the approval of the diploma that “will consecrate a set of quantitative levels on the effort rate, with housing credit and consumer credit.” “In case there are difficulties in complying with the credit, there will necessarily be a renegotiation proposal.”

They can then be sent to the PARI process (Action plan against the risk of non-payment), for the reduction of the interest rate for a time or a new credit. Never implying interest rate increases.

“It is essential that this diploma disciplines” the renegotiation processes to avoid defaults “that are of no interest to anyone,” he says, not even the banks, from whom he asks for an “energetic” and proactive attitude.

Pedro Nuno Santos begins to talk about the approval of a bill for the National Housing Programprovided for in the Basic Housing Law.

“The national housing program has a temporary scope until 2026, applies to the entire national territory and provides for the objectives and priorities in housing policy,” says the minister, which will be a “coherent” and “perennial” policy for housing in Portugal .

There are 22 measures that imply a multiannual budget commitment. It includes the expansion of the public housing stock, where Portugal “compares poorly” with other countries, says Pedro Nuno Santos.

2,377 million euros is the investment until the end of 2026 in this section, said the minister.

In addition to the measures for low-income citizens, Pedro Nuno Santos says that the program will also affect the middle class. Buildings or land will be mobilized to build or rehabilitate and could help”about 6,800 middle-income families”.

The press conference after the Council of Ministers begins, with mariana vieira da silvaMinister of State and Presidency, and Peter Nuno Santos, Minister of Infrastructure and Housing. Participate too Joao Nuno MendesSecretary of State for Finance.

Before knowing the exact contours of the diploma course, the banking sector has already commented on what is to come. Vítor Bento, president of the APB, drew attention to the need to “prevent good intentions from ending up generating results where what is desired contradicts or is overwhelmed by unintended consequences.”

In a parliamentary hearing, Vítor Bento warned about “the effects that ‘paternalistic’ measures to protect families can trigger.”

An even more forceful message was conveyed by Miguel Maya, president of BCP, who on Monday warned that clients should only request restructuring if it is “strictly necessary”, warning that those clients who request it may be “marked” and suffer a “severe “stigma” in your relationship with the bank and in any new credit application in the future.

BCP warns clients of the “stigma” of requesting credit restructuring due to a rise in the Euribor

The Government has already revealed some of the measures that should be included in the diploma. The Secretary of State, João Nuno Mendes, revealed some measures in parliamentary debate and there were also news in the press that anticipated some general lines of the new legislation.

The main idea behind the diploma is that the clients should not have an effort rate higher than 40% in the payment of credits, that is, the relationship between monthly income and monthly charges. That point, coupled with an increase of at least five percentage points in charges, in the last year of funding, dictates the possibility of a renegotiation. If the effort rate is greater than 50%, the five percentage point increase criterion does not need to be met.

And on whose side is the initiative to go ahead with the renegotiation, from the clients or from the banks? According to Jornal de Negócios, the initiative may come from clients, but banks will also have to implement mechanisms to detect cases in which these two criteria are met, presenting solutions for these clients within 15 days.

Among the measures on which João Nuno Mendes lifted the veil, there is also the suspension of early repayment commissions throughout 2023 -only in variable-rate loans- and also the extension of terms but with the right to set back.

Mortgage loan interest. The Government lifts the veil on some measures that it will require from banks

Another measure will be to give workers the possibility to ask the employer to move down one level in the IRS withholding tableif they have housing credit, in order to free up more disposable income to meet the increase in monthly expenses (which, of course, will lead to a lower refund/higher payment when doing the accounts with the Treasury the following year ).

Buenas tardes,

we open this live blog to accompany the press conference associated with the meeting of the Council of Ministers this Thursday, where it is expected that the Government will finally unveil the “specific diploma for banking” that will create a new framework for housing credit contracts and eventual restructurings that the customers may need due to the rise in Euribor rates.

The package of measures has been prepared by the Government, together with the Bank of Portugal and the Portuguese Banking Association (APB).

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