Renegotiating Housing Loans

We are by your side.

Banco Montepio implemented support measures defined by the State regarding Housing Loans. We are with you. 

Renegotiation of Housing Loans is a government initiative, established by Decree-Law no. 80-A/2022 of November 25, defining measures to mitigate the effects of higher reference rates for credit contracts.For the purposes of applying this regime, the renegotiation of credit contracts for the acquisition or construction of permanent housing, with a variable rate, does not incur any penalty or charge any commission.

 

The objective is to support families who in recent months have suffered a significant increase in installments on their Housing  Loan contracts.

Frequenly asked questions.

Can all credit agreements be renegotiated under this new Decree-Law?

No. All permanent home loan contracts, with a variable interest rate and with an outstanding amount equal to or less than 300,000 euros, are eligible for renegotiation within the scope of this new legislation, in which: 

  

1. “Significant worsening of the effort rate” when: 

  

The  effort rate reaches at least 36%: 

  

- following an increase of 5 percentage points compared to the effort rate in the same period last year or, for contracts concluded in the last 12 months, compared to the date of its conclusion; 

  

or 

  

- following an equal or greater increase in the reference index of the contract in question, compared to the value considered for the purposes of projecting the impact of the future increase in that index, carried out in accordance with article 16 of Decree-Law no. 74- A/2017, of June 23, in its current wording. 

  

B. The effort rate was higher than 36% in the same period last year and one of the situations mentioned above occurs. 

  

2. “Significant rate of effort”: 

  

when the borrowers' effort rate corresponds to at least 50%

Until when can you join?
This new legal diploma is in force until December 31, 2023.
What do I need to do to join?

You must go to one of our branches, and present one of the following documents:

 

- Income Statement for the last two years (IRS and settlement statements);

  

- Last three payslips;

 

- For Individual Entrepreneurs (ENIs), as well as Free-lance Workers and those with seasonal income:  Invoice statements for the last 6 months - Balance sheet for the previous semester or income statement by nature.

Why is submitting this documentation necessary?
The bank takes the necessary steps to assess signs of a significant increase in the effort rate or the verification of a significant effort rate for each borrower, to assess the risk of default and, to that extent, requests documentation. The calculation of the rate is based on available income and the set of responsibilities that appear in the Bank of Portugal liabilities center.
Is there a deadline for submitting the documentation requested by the bank?
Yes, a maximum period of 10 days from the date of the bank's request.
What should you do when the bank has not yet requested documentation, but you would like your situation to be assessed?
You must go to the bank with the necessary documentation, there is no need to wait for the bank to request documentation.
What solutions can the bank present to reduce the installment, within the scope of the Decree-Law?

There are several possible solutions to reduce the monthly charge, for example: temporarily extending the contract term, consolidating credits, temporarily reducing the interest rate, introducing a capital grace period or entering into a new contract.

 

None of the proposed solutions may imply an increase in the interest rate.

If you choose to extend the deadline, is it possible to return to the initial deadline when the financial situation improves?
Yes. During the period of application of the extension of the repayment period, you can request the bank to resume the initially contracted period.
If the eligibility requirements to join the renegotiation under the decree-law are not met, is it possible to request credit renegotiation?
Yes, but you cannot join under this legislation.
Can a Housing Loan contract in default be included in renegotiation under the Decree-Law?
No, but you can speak to us as soon as possible to help you find the best solution.
Is it possible to opt for credit repayment?
Yes. Until the end of 2023, you will not pay an early repayment commission on credit contracts for the acquisition or construction of permanent housing that have a variable rate, regardless of the amount of the credit.
When will the installment be updated?
The update of the installment may undergo changes on the date on which the index is updated, which can be Euribor at 3, 6 or 12 months, depending on contracted.
If you renegotiate a contract under the new PARI regime (DL 80-A/2022), will the person be marked in the Credit Register Centre (CRC)?

According to information from the Bank of Portugal on its Bank Customer Portal, “contracts renegotiated under the new PARI regime – Action plan for the risk of non-compliance (Decree-Law no. 80-A/2022, of 25 November ) do not have any specific marking in the Credit Register Centre (CRC) that allows banks to identify them.

  

More specifically, credit renegotiations are identified in the CRC with one of the following characteristics:

  

- Renegotiation due to non-compliance – when a contract has been renegotiated due to non-payment of a loan;

  

- Regular renegotiation – when there has been a change in the initial contractual conditions without the debtor; being in a default position.

  

A contract renegotiated under the new PARI regime will be characterised as a “regular renegotiation”, indistinguishable from other credit contracts renegotiated for reasons unrelated to financial difficulties, such as, for example, contractual improvements due to the person's greater negotiating power. ”