I was under the PARI. Can I fix the house payment?

Reduce and fix a monthly installment value can be done through several options: Know them all, with the help of a credit intermediary from Poupança no Minuto. Or read, first, the answer to the title question, then.

PARI and fixing the home loan installment: What does the law say?

The Bank of Portugal (BdP) explains that yes: Customers covered by the PARI process - Action Plan for Non-Compliance Risk - can now join the Government's measure on fixing and reducing the monthly house payment.  

This since the risk of default on the housing credit has been resolved through renegotiation of the loan conditions during the PARI.

So, customers with renegotiated credits by PARI, can now fix their home installment for the two years provided in the measure.

However, it is worth noting that customers who are currently still covered by PARI cannot adhere to the measure in question. This is because "the law that regulates the regime of setting the housing credit installment states that customers covered by the action plan for default risk (PARI) are excluded, as can be read in news shared by Notícias ao Minuto.  

Given that, according to the same news, the client and the bank "reach an agreement to renegotiate the credit contract," the contract is no longer covered by the PARI and it is understood that "the renegotiation allowed to overcome the default risk situation." Therefore, "the fact that a credit contract has been renegotiated under the PARI does not prevent access to the installment fixing regime".

In case the clients enter the PARI process again, after the first renegotiation of the conditions, they automatically lose access to the installment fixing regime while the process is open.  

How does the Government's measure work to fix the benefit?

It is worth remembering that the measure in question allows mortgage loan clients to fix their installment for two years and lower the amount by applying 70% of the average Euribor from six months before the previous month. This request can be made from November 2nd until the end of March 2024.

But it is important to note that, four years after the measure ends, you will have to pay the differential amount between the original installment and the fixed one, an amount diluted by the remaining term of the credit contract. Therefore, "the total amount of interest to be paid will always be higher", as warned by the Central Bank.

Can I secure the payment of the house differently?  

Note that if you have a variable rate on your home loan indexed to the Euribor, there is another way to fix the monthly installment: fix the interest rate.

And how can you do this? By asking your bank for a renegotiation of the contract terms or transferring your mortgage to a new bank.

When considering a credit transfer for this purpose you should know that: 

• Currently, variable rates indexed to Euribor are around 4%;
• A mixed rate can keep your fixed rate for a period of years, allowing you to have security and stability while Euribor rates do not go down again;
• There are mixed rate campaigns that banks are now promoting, starting at 3%;  
• With this option, you won't have to repay interest later on.

If you would like to know more about how this process works and study your specific case to understand how much you can save, contact the Poupança no Minuto! We offer a completely free service and personalized guidance, so you never feel abandoned.