Average effort rate in home credit was (significantly) lower in 2021.

Looking for a low effort rate? Learn how to lower your credit installments by using an intermediary from Poupança no Minuto. But first, read the relevant data.

What is the average value of the effort rate in 2021?

According to median values released by the National Institute of Statistics and quoted by Notícias ao Minuto, it can be concluded that the average effort rate value with permanent housing credit was 12.78, considering 130 municipalities in the North, Center, and Algarve regions.

In addition to being considered values ​​mediated higher than the national reference, nothing compares to the current situation of effort rates in mortgage financing.

Let's first look at the values for 2021: 

• The highest average effort rate belonged to the municipality of Albufeira - 16.45%;  
• 20% of borrowers with the highest effort rates allocated 1/5 of their income to housing credit installments;  
• The median effort rate in this credit was higher for borrowers aged 34 or younger - 14.15%;
• And the median value of the housing credit effort rate was 19.40% at the national level.  

But after all, what is the effort rate and what are the recommended values?

Remember that the effort rate represents the burden weight of credit installment payments in relation to monthly income received in a monthly budget. That is, to calculate the effort rate, the following formula is applied:  

Effort rate = (Loan installments / Monthly income) x 100.

So, in order to calculate the effort rate, you must take into account the various credit installments you pay, whether it be for mortgage, car, personal loans or even credit cards.  

Within the monthly income received, what should be taken into account is the net salary, in case of an employee, rental income received, if you own leased properties, pensions or other fixed incomes declared in the IRS.  

To better understand the values ​​mentioned above, let's see what are the recommendations currently established by the Bank of Portugal:  

• When the rate is up to 30%, it is considered ideal maximum;
• When the rate is between 30% and 34% it is considered ideal;
• When the rate is between 35% and 40%, it is considered high;
• And when the rate exceeds 40% it is considered very high.

Ideal values ​​are becoming increasingly difficult to achieve in today's context of inflation, price increases, and rising interest rates that lead to increases in Euribor rates linked to housing credit.

With the high values at which the Euribor rates are, any borrower who has a variable rate mortgage indexed to Euribor continues to see their monthly installment increase. 

Did you know that it is possible to escape this situation? By making a credit transfer, you can access campaigns that banks are promoting with fixed and mixed rates. With these options, besides achieving greater stability and security because the rate does not change, you can get lower amounts and, consequently, save on your monthly credit installment.

If you are interested in this option, contact the credit intermediaries of Poupança no Minuto! We offer a free service and assist you throughout the process quickly and personalized. We take care of everything for you, and you also have access to the most suitable credit proposal for you!