Housing loan subsidy support scheme extended to more families

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The Government will extend the support scheme for the subsidy of housing loans to more families and wants banks to offer a fixed rate to those who already have credits, announced the Minister of Finance.

In an interview with the newspaper Público, Fernando Medina, speaks of this extension to families that have an effort rate above 50%, as soon as the index exceeds 3%, explaining that, as the indexing already exceeds this value in all maturities, “most families that meet the criteria of the law will be able to benefit from support in relation to their house installment”.

Fernando Medina also points to a “second dimension” of this change that the Government intends to make, so that all families receiving this support will benefit from 75% of the increase in the interest rate compared to 3% (now, it is 50% in the fifth and sixth brackets).

Asked whether the measure that was in place was not having an effect. Medina replied: “Interest rates are at a level where they are already too high for the burden that households can bear, particularly on the most recent contracts, which had not yet risen enough for the mechanism to be effective.”

“One last important point of this amendment that we are making is that this decree applies to all situations from the beginning of the year 2023”, he clarifies.

In this interview, the minister also indicates that the possibility of “significantly expanding” the offer of fixed-rate schemes is being worked on with banks and the Bank of Portugal – and will be presented in September.

“A lot of households are asking: ‘This is going up, but how long will it go up? And how much will it go up?’ And the answer to this second problem, in particular, has to be a much greater spread and possibility of using fixed-rate schemes, or at least fixed-rate schemes for a certain period,” he explains.

In the interview, Fernando Medina also mentions that the Government will evaluate the possibility of extending the zero VAT measure on some foods, which has been extended until the end of the year.

“Yes, we will analyze, depending on inflation, interest rates, the needs at each moment,” he said.

Regarding the privatization of TAP, he said that the step prior to the officialization of the process has already taken place, which was the choice of the evaluators, and that from the moment they deliver their report the Government will be able to approve the decree-law with the general principles of the privatization of the company, which should happen in September.

“Our expectation is that it will happen in September and that decree-law is what formally makes the start of the privatization process official,” he says.

Still on the teachers’ protests, he explains that all civil servants have seen their careers frozen in the years of the ‘troika’, that from 2015 onwards “a very important work has been done to recover normality”, but asks: “If it were done to one profession, would you agree that it should not be done to others?”.

“We have to treat everyone absolutely equally,” he insists.

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