Increase in interest rates: How to lower the installments of my home loan?

Are you having trouble paying your mortgage? Turn to Poupança no Minuto's credit intermediaries to understand the available solutions. Then read what options you have to lower the installment.

How can I lower the installment of my home credit?

Renegotiate the credit conditions

The first step to take when you want (and need) to lower your home loan installment, is to go to your current bank to express your dissatisfaction and inability to pay the financing with the current conditions.

The bank can review the conditions and suggest new options, as a way of renegotiating the contract, allowing for a break in the monthly installment.

For example, the bank can propose to lower the spread of the credit if other associated products are contracted, such as a credit card, or propose to extend the loan term (if not already at the maximum), with the possibility of returning to the previous one.

Note also that the bank is currently required to renegotiate certain housing credit contracts. This is an exceptional measure by the Government, applied to credit contracts for the acquisition of own and permanent housing with variable interest rate and debt value up to 300,000 euros, when the effort rate is equal or higher: 

• 50% off
• A 36% increase resulting from a more than 3% increase in the associated interest rate;
• A 36% consequent increase from a 5% rise in effort rate over the past year.  

Advance with a credit transfer  

This is an option that has been highly sought after by customers, as it allows access to different (and often better) conditions. If the bank where you have your housing credit cannot offer you more favorable or compensatory conditions, ask for proposals from other banks.

According to your context and preferences, you can get a more attractive proposal for your credit at another institution.  

From the different proposals, you must analyze and compare them to understand if it is worthwhile compared to what you currently have.

Through the housing credit transfer, you can access:

• Reduction of spread and the Nominal Annual Rate (TAN).
• Extension of contract deadline.
• Change of interest rate type (for example, from variable rate which is increasing due to the Euribor, to a fixed rate without an index).
• Transfer or reduction of required insurance premiums;  
• A possible increase in the market value of the house, with a new appraisal.

When advancing with a proposal from another bank to transfer the credit, be aware that you must inform the current bank with a 10-day notice before doing so. Keep in mind that the bank also has 10 days to share the data and documents related to the credit with the bank to which the financing will be transferred.

Have more credits? Make a consolidation.

If, in addition to housing credit, you have other contracted credits such as consumer loans, or credit cards, you can consolidate all of them into one. For example, having a mortgage, plus a car loan and a credit card, it is possible to take out a consolidated credit that combines the three.

In this way, you will only pay a single installment for the various credits, which may be of lower value, since the interest rates are more attractive, and the loan term can be significantly extended. But by stretching the term, you end up paying more interest on the credits later on.

So, it is a product that allows for greater short-term savings, but that can represent a greater burden in the long term.

Therefore, if you need to immediately reduce the installment of your home loan, these are some of the options available to you.  

Want to move forward with something or learn more? Contact Savings in One Minute for a free and personalized credit intermediation service, and ensure some extra room in your monthly family budget. Do your simulation now and find out how much you can save!