European Central Bank cuts interest rates for the first time since 2016.

If you need a more immediate relief on your home loan, contact the credit intermediaries of Poupança no Minuto and find solutions such as renegotiating your current conditions or transferring your credit to another bank with a lower installment.

BCE lowers all three interest rates, as predicted by analysts.

The European Central Bank (ECB) decided to lower, for the first time since 2016, the three interest rates, now confirming analysts' predictions.

This decrease will now allow relief in loans for families and companies that had variable rate loans linked to Euribor rates. variable rate financing.

So, according to the information shared by Notícias ao Minuto, the fixed rate for main refinancing operations decreased to 4.25%, the rate for permanent liquidity-providing facility dropped to 4.5%, and the rate for permanent deposit facility went down to 3.75%.

"Since the ECB Council meeting in September 2023, inflation has fallen by more than 2.5 percentage points and inflation prospects have significantly improved," read the explanation from the ECB in the news article.  

"Underlying inflation has also slowed down, reinforcing signs of weakening pressure on prices, with inflation expectations falling at all horizons. Monetary policy has maintained restrictive financing conditions. By attenuating demand and keeping inflation expectations well anchored, this fact has contributed significantly to the decline in inflation," it further reads.

In order to “ensure the timely return of inflation to its medium-term inflation target of 2%”, the ECB reinforces that it will “maintain the key interest rates sufficiently restrictive for as long as necessary”.

"The ECB's governing council will continue to follow a data-dependent approach meeting by meeting in defining the appropriate level and duration of restrictiveness," specifying that "its decisions on interest rates will be based on the assessment of inflation prospects, in light of economic and financial data as they become available, of the dynamics of underlying inflation, and of the robustness of monetary policy transmission," the news article reports.

However, it is still mentioned that the ECB's council does not commit yet to a specific rate trajectory. This is in the context of an increase in inflation in the euro area, two tenths of a percentage point from April to May, reaching 2.6%.  

It should be emphasized that the decrease in interest rates was the first since March 2016, even though it reduced the price of money from 0.5% to 0% and lowered the permanent deposit facility rate to -0.5% in September 2019. This is also the first decrease since the start of the tightening cycle of monetary policy, with 10 consecutive hikes between July 2022 and September 2023.

If you have a home loan with a variable interest rate, linked to the Euribor and subject to interest rate fluctuations, and need a lower monthly payment in the short term, know that there are other solutions that can relieve this burden more immediately. By renegotiating your terms or transferring your credit, you can change your interest rate regime and access current attractive bank campaigns with mixed rates to ease your monthly payment.

The credit intermediaries of Poupança no Minuto can help, for free, throughout this process! Simulate the transfer of your housing credit with us, and start your savings process now!