Taxas de juro vão continuar a subir? Saiba o que fazer ao seu crédito habitação

Interest rates will continue to rise? Find out what to do with your housing credit.

At the annual meetings of the International Monetary Fund (IMF) and the World Bank in Marrakech, Morocco, the chief economist predicted the continuation of high interest rates, which could "push the poorest countries into bankruptcy". But what to do in the face of the continuous rise in interest rates, if you have a home loan?

26 Oct 20234 min

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Looking for savings solutions on your home loan? Contact a credit intermediary directly, like Poupança no Minuto, to help you find the most appropriate solution for your situation! Or understand first the forecasts of what will happen to interest rates, and how to minimize the impact on your mortgage financing.

High interest rates? Possible long-term consequences.  

According to a publication by Notícias ao Minuto, the World Bank's chief economist, Indermit Gill, indicated at a press conference at the official opening of the annual meetings of the IMF and the World Bank that the good news is that currently, "no major economy is actually in trouble", even "despite all the shocks", in the long term things will be different. "The problem now is that, due to high interest rates, growth is slowing down a lot," assures the leader.

Referring to the 70s, Indermit Gill also notes that, "when the Federal Reserve raised interest rates for a long time, one of the lessons we learned is that the adjustment cycle lasted not only one or two years, leaving about 24 economies bankrupt, and I think we can anticipate that some countries will have problems now".

This is why the fear of long-term consequences of high interest rates for longer periods was the central theme of this conference, focusing on "the importance of the impact that high interest rates have on less developed countries, which depend on external loans and financing, usually in dollars, to finance economic and social development," as stated on the news platform.

This persistence of high interest rates "can be a complex event in various ways, from investments to people who, over the years, have become accustomed to a low interest rate environment," notes World Bank president Ajay Banga at the same conference.

In the reports presented at these meetings, a forecast for 2024 of lower inflation (currently still high) can be observed, as well as a greater economic slowdown.    

In addition, and according to the publication of Notícias ao Minuto, the IMF predicted that global growth will slow from 3% in 2023 to 2.9% in 2024 and that inflation will decrease from 6.9% in 2023 to 5.8% in 2024, not expecting a return to target in most central banks until 2025 in economies.

How to minimize the impact of high interest rates on mortgage loans?

To minimize the impact of high interest rates on your home loan, in the case of a variable rate, you should review the current conditions of the contract.

Currently, the fixed interest rate is lower than the variable interest rate indexed to Euribor (index that has been subject to consequent increases in interest rates). In other words, currently with this index, you pay a rate that has been constantly rising and increasing the monthly installment you pay for your credit.  

By fixing the credit rate, you guarantee the same rate and monthly installment, providing greater stability and security, without any variations or surprises.

Banks are currently running mixed rate campaigns that allow fixing the rate for a period, such as two years, and then returning to the variable rate. It can be a good option as, while interest rates continue to rise, you pay a fixed amount that does not follow Euribor variations; and after that period, when it is expected that interest rates will decrease again, you will return to a variable rate.

Can I change the interest rate on my credit?

And how to switch from one interest rate to another? You have two options: either negotiate with your bank for the current conditions and request this change, or, if the bank does not allow it, transfer your credit to a new bank that does.

The transfer of housing credit, in most banks, does not imply costs (only a commission for early repayment, but which has been temporarily suspended by the Government).

Speak to a credit intermediary to move forward with proposals to banks and reduce the amount you pay for your mortgage! The agents at Poupança no Minuto offer a free service and accompany you throughout the transfer, streamlining communication with banks, handling paperwork, and helping you compare and choose the best proposal for you.

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