March 4. 2024. 7:20

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Portuguese government approves mortgage support scheme

Portugal’s cabinet approved an interest rate subsidy for housing loans that will be in force until the end of the year with the possibility of renewal, Prime Minister António Costa announced on Thursday.

Costa announced the measure at a press conference that followed the Council of Ministers meeting in Lisbon.

The interest rate subsidy will cover families with incomes up to and including the sixth income bracket of the IRS and with an effort rate of 35%, said Costa, adding that it also covers credits for acquisition, construction or works on their own permanent home.

It covers credits up to a maximum value of €250,000, with support paid retroactively to January of this year, with a limit of €720 per year (€60 a month).

The measure will vary according to the income of families and “will be in force until the end of the year and may be renewed if interest rates are not back down by then,” he added.

Families with incomes up to and including the 4th IRS bracket will receive 75% support, and families in the 5th and 6th brackets will receive 50% support. This percentage will take into account the difference between the Euribor rate contracted and the current rate.

“This support exists whenever there has been an increase of more than 3% in relation to the value of the index on the date of the signing of the contract”, and the support (of 50% or 75% depending on the case) will be applied over this difference, the prime minister explained.

According to the examples given by Costa, a family in the 3rd IRS bracket, which has a home loan with Euribor at 0.25 and which currently has a rate of 3.7, will be entitled to monthly support of €61.

A family in the sixth income bracket that has contracted Euribor at a zero rate and is now at 4.5, then the support will be €88 per month, he added.

According to the prime minister, the measure covers loans “the credits contracted until yesterday [15 March]”.

The public consultation of the part of ‘Mais Habitação’ that provides support to tenants and people with housing credit ended on 13 March.

On 24 March, the public consultation of the remaining programme (which includes measures that will have to be sent by the government to parliament) will end.

The global package of measures was approved by the cabinet on 16 February and sent for public consultation on 20 February.

The measures of the ‘Mais Habitação’ Programme will cost about €900 million, which will be taken from the State budget, according to the government. (Denise Fernandes/