The additional amount considered by banks when calculating families' effort rate will increase from 3% to 1.5%.
The Bank of Portugal (BdP) decided to alleviate the stress levels of new housing loans contracted at mixed and variable rates, Dinheiro Vivo knows. The extra shock, considered in the calculation of the effort rate and which simulates the financial capacity of families to face a hypothetical increase in the Euribor, will increase from 3% to 1.5%, predictably at the end of September.
In addition to mortgage credit, this measure also covers the consumer segment, halving stress across all maturities. Thus, for loans with a term of up to five years, a shock of 50 basis points (0.5%) will now be applied, while for credits between five and ten years, the rate to be tested will be 100 basis points (1%) . In the case of loans contracted for more than ten years - as is usual for purchasing a house - they will be worth 150 basis points (1.5%).
With this measure, it is expected that more families will be able to access loans to purchase a home, without compromising, however, the necessary prudence with regard to the risk of default - something that should not undergo significant variations, according to the regulator's forecast. . Regarding the impact of new stress rates on credit granting, estimates point to a recovery to the levels recorded at the start of 2023.
When granting credit, financial institutions must take some criteria into account. Among them, the effort rate, which reflects the weight of payments in a household's net income and which, since 2018, cannot exceed 50%.
Currently, to calculate the debt service-to-income (DSTI) - the more technical term -, banks consider the interest rate in force at the time of granting the loan and add 3% to simulate the ability of individuals to pay installment, in an adverse scenario of rising interest rates. This means that, with Euribor currently at around 4%, applying this additional shock implies considering interest rates above 7% - levels that experts do not predict will be reached.
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Source: Dinheiro Vivo
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