The State will subsidize a portion of the interest payable by families with recent home loans. At issue are loans contracted after July 2018, in which the interest rate increase is three percentage points higher than that initially used, and even with a loan amount of up to 200 thousand euros. In these cases, the interest subsidy will be 50% of the amount above the three percentage point increase in the interest rate.
This is one of the measures announced this Thursday by the Government in the housing package, which in relation to credit for home purchase also includes the obligation for banks to have a fixed rate offer – a measure with little detail – and also the possibility of applying capital gains on the sale of a property on the amortization of a home loan for the owner or descendants.
With regard to the credit subsidy, the measure will only apply to home loan agreements that have been subject to a credit test. stress of raising the interest rate by another three percentage points. That is, three percentage points are added to the contracted rate in order to test the families’ ability to pay. It turns out that this rate stress only started to apply from July 2018.
Then there are still three limits. The first is that the measure only applies to families with incomes up to the sixth IRS scale, that is, with annual incomes between 25,076 euros and 36,757 euros. In addition to these, the limitation of the amount of interest to be subsidized cannot exceed an amount and a half of the Social Support Index (480.43 euros), that is, it can only go up to 720 euros per year, and also the value of the loans not exceed 200 thousand euros.
This measure comes after the Government’s diploma, Decree-Law nº 80-A, of November 25, 2022, which intended to set new requirements for the banking sector for the renegotiation of home loan contracts, in order to reduce the impact of the rise of the Euribor rates, a process that is not going as smoothly as desired, due to the reduced opening of banks to implement the different possible measures.
Finance Minister Fernando Medina guaranteed that the interest subsidy measure was not taken because the renegotiation process is not having the expected results.