Housing loan. Monthly charges soar in July

The threat has come to fruition. The European Central Bank (ECB) has already announced a rate hike of 25 basis points in July and another 50 basis points in September. And it may not stop here. Still, Christine Lagarde promised a “gradual” and “sustainable” trajectory. This puts an end to the negative interest rate cycle we have witnessed in recent years.

These increases are automatically reflected to those who have credit and add more weight to those who rely on a loan to buy a home. But what is the impact? According to an analysis conducted by Compara Já.pt on oi, consumers will pay more than € 40 per month for a loan of € 186,000 granted over 33 years, which is about about per year. Equivalent to an additional charge of € 500. After all, if the installment payment in June last year was around € 537.12, it will rise to € 588.77 in July this year (see table next).

In the same analysis, for a lower value house (€ 125,000), over the same period, the increase is about € 30 per month, and thus an increase of € 360 per year. The account is simple. In June last year, monthly installments were fixed at € 363.85, but will rise to € 392.07 in July next year.

However, the larger the loan amount, the greater the increase in monthly installments. According to the same survey, for a house of € 275,000 paid in 33 years, the monthly increase would be around € 60. Over the year, the difference will be 732 euros. This means that if the buyer paid € 794.12 per month last June, it will grow rapidly to € 855.70 in a few days.

“The average interest rate is rising and its number has increased significantly since the beginning of the year. It is important to note that interest rates will increase by 0.5% in just five months. In addition, the average interest rate will rise again to 1%. It’s exceeded. This hasn’t happened since July 2020, “said the same survey conducted on i. Also this Wednesday, INE revealed that mortgage rates rose 2.1 basis points (bp) in May to 0.826%. This is the highest interest rate since April last year.

Despite these increases, the document notes the fact that demand for mortgages has not diminished, and in March 1,691 million, the largest amount of euros available to banks in the last five years. It states that it has reached the euro. “Given that we live in a very difficult moment and there is little certainty about financial markets, we need to pay attention to our finances. Therefore, we adopt some strategies for housing credit. I recommend you to do it. ” From João Melo, Compara Já.pt.

And given this scenario, he says there are two ways to prepare himself in the best possible way for the future of the financial system. The terms contracted in the meantime may (and will be) different from those recently offered by the market. In the second example, it may also be positive to carry out a mortgage transfer. This is a somewhat unknown solution, but the truth is that renegotiating credit with your current bank or moving it to another bank will almost always save you hundreds of euros, “he said. Mentions our newspaper.

Will the search be downloaded? Henrique Tomé, an XTB analyst, acknowledged to me that in Portugal, real estate market problems are primarily related to the fact that demand for real estate is very low. But he acknowledged that “in the short term, rising interest rates could effectively reduce demand in the real estate market, which could lead to a slight price adjustment,” he said. Real estate price revision scenarios that may also contribute to this. “

However, he recalled that interest rates had been the lowest in recent years and said these rises were gradual and should not have a significant impact on families. “The ECB is much more cautious when compared to what’s happening in the United States, but it’s possible in reality. Except for the strong real estate sector, some sectors have slowed. I’ve seen you. ”

Even more pessimistic is Nuno Garcia, Secretary of GesConsult, where rising interest rates will increase monthly housing-related costs, including monthly loan payments. “For families, this is difficult to overcome. Electricity, water and gas bill payments are often already a challenge as the situation worsens with monthly credit increases. . “

Given this scenario, authorities advise buyers to analyze the situation carefully and understand whether they can guarantee payment of costs. “Don’t experience what happened in 2011 when credit was suspended due to a payment failure.” Nuno Garcia still believes that the risks are less than the risks he saw at Troika. And I will explain the reason. “Today, there are more rules for mortgage approval and people are getting more information about the whole process. I don’t think we’re going to experience the same situation, but definitely, We need to be especially careful. We get out of one crisis and almost instantly into another. We need the ability to adapt and be considerate so that we never experience the same thing again. “

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