Reduzir prestação do crédito habitação: Transferência ou nova medida do Governo?

Reducing home loan installment: Transfer or new measure from the Government?

Faced with the new government measure to help Portuguese pay less for their home loan, it is important to analyze if it is worthwhile compared to other options available in the market. So, before activating this measure, let's see: Can you save more with a housing loan transfer?

09 Oct 20236 min

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If you are looking to save on your home loan, contact the credit intermediaries of Poupança no Minuto and understand which options make sense in your case. But, to first understand the comparison between the new measure and a credit transfer, keep reading next.

What does transferring your mortgage credit mean?  

Transferring your home loan to another bank means ending the debt at your current bank and taking out a new loan with another bank that offers you more favorable financing conditions.

Therefore, if you are dissatisfied with the current conditions of your credit, and after trying to renegotiate them with your current bank in order to lower the installment, but without success, the transfer is an option you can resort to.

Through a renegotiation of conditions you can get a new proposal where they offer you a bonus on the spread, in exchange for hiring new products associated with the loan, such as a credit card.

However, it may not be worth it compared to new offers that other banking institutions may present to you where you can save more on your mortgage credit.  

Request proposals from other banks

Through your property and capital in debt, request simulations from other banks so that you can opt for a new proposal with the right conditions for your current situation.

With a credit transfer, you can get a lower spread or a different interest rate regime (such as switching to a fixed rate that may currently be cheaper than the variable rate). This depends on other conditions, such as direct deposit of salary, contracting a credit card, required insurance contracted with the bank's insurer. However, you may even be able to get a lower insurance premium from another insurer that offsets the increase in spread.  

Making a transfer of your credit allows you to start the financing process again and choose the right conditions for you.

Mortgage credit transfer without costs

About the costs of this process, in a normal context, it could be subject to an early repayment fee, at most 0.5% of the capital repaid in case of variable interest rate, or a limit of 2% of the capital repaid in case of fixed interest rate. However, currently, there is a measure in effect that exempts clients with variable interest rate from paying this fee.

After, most banks support all expenses (depending on the financing amount in some cases).

What is the new Government measure regarding housing credit?  

The new Government measure that allows reducing the housing loan installment and stabilizing it for two years, allows it to be calculated based on an index corresponding to 70% of the Euribor at six months (applicable to other terms). In other words, ensuring the same reduced installment amount over the next two years.

Those home purchase credit contracts concluded by March 15, 2023, with a variable interest rate and a repayment term that extends for at least another five years, have access to this measure.  

When does the measure come into effect?

To access this measure, you must request it from the bank as of November 2 and by the end of the first quarter of 2024. The bank then has 15 days to respond to the request, and the client will have a month to make a decision. From the moment the plan is accepted, the support is applied in the following 24 months.

However, it is important to mention that the difference between the current due installment amount and the amount you will start paying in the 24 months needs to be refunded four years after the end of the period in which the installment is fixed, being diluted over the remaining loan term. But you can also anticipate this differential amount in advance, without commissions or additional charges.  

Between the two options, which one is more worth it?

Let's see, between the two options (transferring the housing loan or adhering to the new Government measure), which one will compensate more: 

Firstly, we must take into account that, considering the possible costs of transferring the home loan, in 2023 there is still a measure in force that exempts credit borrowers from the commission for early repayment in variable rate financing. Therefore, in these cases, it would be a cost to remove from the equation. As for other costs, as mentioned, most banks currently cover all expenses.

Analyzing the availability of the two options: transferring your home credit is a process that you can start today, while the new measure proposed by the Ministry of Finance will only be available from the next day November 2nd.

What reduces the installment in both cases?

The current installment of the loan will decrease in both cases, but you should consider what leads to this reduction: Through the applied measure, the discount on the benchmark is temporary, as you will have to repay the amount due after four years; whereas with a mortgage transfer, the interest rates may be lower immediately, without the need for repayment later.

In addition, by transferring credit, you can access new conditions, such as also transferring your life insurance. This process can significantly reduce the monthly loan installment.

It should also be noted that by adhering to the Government's measure regarding housing credit, the process is handled directly with the bank, which does not allow much room for renegotiation. And transferring your housing credit can be done with the help of a credit intermediary.  

Transfer the mortgage? Contact a credit intermediary.

Considering moving forward with a mortgage transfer, the first step may be to contact a credit intermediary. These services are completely free and allow for facilitating communication between banks and a customer.

With an intermediary, you don't need to worry about bureaucracy or negotiating proposals. The same presents you with new bank simulations and helps you compare the various ones, in order to choose the proposal with the right conditions for your mortgage loan.

The credit intermediary Poupança no Minuto provides you with a single agent so that you have access to personalized treatment and support throughout the entire transfer process. Contact us to clarify all your questions, start the process, and start saving now with your housing credit!

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