Euribor Below Zero: BE and PS Agree to an Interest Credit

22 March 2018

The Left Bloc (BE) welcomed an agreement with the Socialist Party (PS) today that would grant banking clients an interest credit when Euribor falls below zero but admitted that it is “two years behind schedule.”

“It’s a significant step forward,” Ms Mariana Mortágua, a member of the bloc, stated at a press conference in parliament, saying that the measure will provide “relief” to an unspecified number of families.

However, the Left Bloc’s parliamentarians affirmed that they did not “want to forget” that this law, “despite being a positive point, arrived late.” The BE initially put forth the proposal two years ago, at the suggestion of DECO – Portuguese Consumer Defence Association, which later received the support of the PS and the Bank of Portugal.

In 2016, a mortgage holder who had a 100,000-euro loan, with a variable rate at six months and a spread of 0.25, “may have lost 308 euros,” a figure that is “more than the monthly instalment.”

With the approval of the decree in the National Assembly, an interest credit would be granted to the banking client, which would only be taken away when interest rates rise and become positive.

It is an “intermediate proposal,” according to Mariana Mortágua, which sends “a clear message” to the banks.

“They cannot change or interpret the rules as they see fit,” and “there must be rules that apply equally to everyone,” she stated, noting although banks repassed interest rate increases on to their clients, negative rates were not reflected in the mortgage holders’ monthly instalments.

Original Story: Lusa / Diário Imobiliário

Translation: Richard Turner