THE the mortgage payment paid by bank customers in connection with home loans increase sharply this month, and the rise can reach 251 eurosin contracts indexed to Euribor at 3, 6 and 12 months, taking into account the latest revisions, according to Deco/Dinheiro&Direitos simulation🇧🇷
What will be the impact in your particular case? Doctor Finance offers an Euribor simulator – which you can access here – which allows “to understand how the provision of your mortgage can evolve”.
“To get a more realistic idea of what can happen to your performance, you need to choose the duration of the Euribor rate (this can be three, six or 12 months). Next enter the month in which the last installment review took place It’s the spread which is associated with the contract”, explains the company specializing in personal finance.
Then, “by entering the amount due and the number of missing monthly payments, the simulator tells you the current monthly payment”. Plus: “To understand what happens to your performance with the evolution of Euribor, use the dynamic bar available in the simulator”.
The home deposit climbs between 108 and 251 euros in December
A customer with a €150,000 loan over 30 years, indexed to Euribor 6 months and with a ‘spread’ (bank profit margin) of 1%, will now pay €658.67, which represents an increase of 186, 07 euros compared to the last revision in June and especially the increase of 170.83 euros for those whose contract was revised in November.
In the case of a loan with the same conditions (amount and repayment term), but indexed to the 3-month Euribor, the customer now pays 618.34 euros, plus 108.18 euros.
Here too, we note an increase of around eight euros in the deposit compared to contracts with the same characteristics, the deposit of which was renewed in November.
These values were calculated taking into account the November Euribor averages of 2.321% over six months and 1.825% over three months🇧🇷
As for loans indexed to 12-month Euribor, the monthly mortgage payment – for a loan under the aforementioned conditions – will be 701.33 euros from this month of December, an increase of 251.69 euros compared to what you have been paying since December 2021 In this case, the value has been calculated taking into account the average of the 12-month Euribor in November, which was 2.828%.
The evolution of Euribor interest rates is closely linked to the rise or fall of ECB interest rates.
After several years in negative territory, the Euribor has started to rise again more significantly since February 4, after the European Central Bank (ECB) admitted that it could raise major interest rates this year due to rising inflation in the euro area.
Since then, the ECB has raised its key rates three times, including the first in July, the first in 11 years.
The 6-month Euribor rate, the most used in Portugal for mortgages, was negative for 6 years and 7 months (between November 6, 2015 and June 3, 2022). The 3-month Euribor, on July 14, entered positive territory for the first time since April 2015. The 12-month Euribor turned negative on February 5, 2016, after having been positive since April 21.
What is Euribor used for?
To Euribor rates are the main index in Portugal in bank contracts that finance the purchase of a house🇧🇷 The 6-month Euribor is the most used, followed by the 3-month rate.
Euribor is set by the average of the rates at which a group of 57 banks in the euro zone are willing to lend money to each other on the interbank market.
Faced with the aggravation of the cost of real estate loans, the Government has approved a diploma which sets the conditions under which banks must offer customers a credit renegotiation to avoid situations of non-compliance. The measures are in effect from November 26, 2022 to the end of 2023.
As part of this package of measures, the charging of commissions to customers who wish to partially or fully repay the loan is also suspended.