Is it harder to get a loan when the Euribor goes up?

The rise of the Euribor impacts the granting of credit, making it harder to obtain mortgage credit.

Yes, the rise of Euribor makes access to credit more complicated. According to DECO PROTeste, it reads in Notícias ao Minuto - "when interest rates rise, banks reduce the amount they can lend to consumers". (Source: Notícias ao Minuto)

This happens because, with higher interest rates, the value of the monthly installment rises, increasing the impact on families' budgets.

Since 2018, banks are required to ensure that clients' effort rate does not exceed 50% of the monthly income. Therefore, when interest rates rise, maintaining this limit means that banks lend less money.

For example: Considering a maximum installment of 750 euros in a 30-year loan, with a spread of 1%, a family could obtain a loan of 203 thousand euros with the Euribor at 1%. However, if the Euribor rises to 2%, the maximum amount decreases to 178 thousand euros. If it reaches 3%, the available amount decreases even further, to 157 thousand euros.  

With the appreciation of real estate and income stagnation, buying a house has become even more challenging, warns DECO PROTeste, according to the news.

Read more: What impact have the Euribor declines had on home installments?

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