Mortgage credit: banks threaten to end mixed or fixed rates

Parliament wants to end credit amortization, but Portuguese Banking Association says they must be compensated when they are not paid in advance.

The PS presented a proposal to permanently eliminate commissions that banks charge on any repayment, whether it is a fixed or variable rate loan.

Chega also proposes limit commissions at 0.5% of the amount that is amortized (which can reach 2% of the principal repaid in the case of fixed interest contracts).

However, the Portuguese Banking Association (APB) did not like the proposals. In a statement sent to the Assembly of the Republic and cited by , he guaranteed that banks can do away with this type of rates (fixed or mixed). Currently, the Fixed rates constitute 6% of new real estate credit contracts and mixed rates 80% (i.e. two or five years of fixed rate that follows the variable).

In this way, the end of the fixed rate would constitute a great impact on Portuguese finances who have a credit to pay, removing security and putting an end to the most common payment method — the mixed rate.

APB guarantees that the amortization of credits “aim to allow banks to compensate for losses or loss of earnings incurred when the duration of said credit contracts is shortened in relation to that originally contracted and on the basis of which the calculations for their economic balance were made”.

According to , there is a possibility of Parliament being able to legislate on the banks themselvesforcing them to maintain the fixed rate, since “Parliament can legislate on anything except the functioning of the Government”.