
The government has decided to extend, until 31 December 2024, "the temporary suspension of the early repayment fee for variable-rate housing loan contracts or those that, having been contracted at a mixed interest rate, are in a variable-rate period or which, having been contracted at a mixed interest rate, are in a variable rate period," reads the statement from the Council of Ministers this Thursday (September 21, 2023), which took place at the Environmental Interpretation Centre in Leiria.
This is, in fact, one of the three measures announced by António Costa's government to mitigate the rise in Euribor rates, the most widely used index in Portugal for home loans, following the constant increases in key interest rates by the European Central Bank (ECB). The other two measures are as follows:
- Families will be able to ask the bank to fix the instalment of their home loan for a period of two years, with the measure covering loans taken out until 15 March 2023;
- Support for subsidising interest on home loans is extended from 720 to 800 euros.
The suspension of the early repayment commission for families wishing to amortise their housing loans had been in force since November 2022 and was due to expire at the end of this year. This means that the government has extended the ban on banks charging early repayment fees by one year.
Reimbursement could be "definitively integrated into legislation"
"The early repayment will be in force until the end of 2024, with the possibility of course of being renewed or even definitively integrated into the legislation," said Finance Minister Fernando Medina at the press conference at the end of the Council of Ministers.
According to the minister, the commission for early repayment of mortgage loans was around 0.5% of the amortised capital, which represented "a very high cost for families and greatly limited early repayments".
In view of the measure put forward in 2022, there was "a big increase in partial and total early amortisations of housing loans", said Fernando Medina, quoted by Lusa. "Another billion euros have been written off" since the measure came into force, he added.