OE2024: What is expected in housing and how to prepare for it.

Want to hire a mortgage loan in 2024, or save with yours? The credit intermediaries from Poupança no Minuto are here to help you... contact us now, or first get to know what is planned for housing in 2024.

What is planned for housing in the 2024 State Budget?

The State Budget for 2024 (OE2024) was delivered to parliament on Tuesday, October 10, and already includes some housing reinforcements. As part of the More Housing package, the programs and respective supports that will remain in effect are now explained.

According to the publication of Notícias ao Minuto, the focus will be "strengthening incomes, promoting investment, and protecting the future".

Starting with the extraordinary income support, for families with an effort rate above 35%, the same investment amount as in 2023 is planned: 250 million euros. Remember that this support can go up to 200 euros per month and is expected to reach around 185 thousand families in 2024.

Along with this measure, the Government also assumes it is "essential to adopt mechanisms of articulation with the private rental market, with a special focus on providing more immediate responses for families with lower and medium incomes".

About the 1st Right program, for supporting housing access targeted at people living in unworthy conditions, a budget of 330 million euros is planned for 2024, with the goal of reaching 26 thousand families by 2026.

The Porta 65 Jovem lease program for young people aged 18 to 35, the Government plans to invest an additional six million euros in 2023, with 37 million projected for 2024. Approximately 26 thousand young people can apply for this program next year through ongoing applications.

More Housing: The measures to be in force in 2024

According to Notícias ao Minuto, the OE2024 also details the new measures of the Mais Habitação, in effect since October 7th.

• In the Porta 65+ program, extended to single-parent households or those with income reduction exceeding 20% in the previous three months, there is an expected budgetary impact of four million euros.
• For the "Rent to Sublease" program, aimed at households with an annual gross income equal to or less than the 6th IRS bracket, five million euros are allocated, with 106 houses with affordable rent being drawn in 18 municipalities of the country.
• There is still a reinforcement of the public housing park at affordable costs for households with intermediate incomes, including 6,800 homes by 2026 and costing 216 million euros.

Mortgage credit: How to prepare for 2024?

Predictions with the State Budget 2024 for inflation remain slightly pessimistic, with a value of 3.3% in 2024. Remember that the ideal value for inflation should be around 2%. With the forecast of rising interest rates also remaining, families with variable rate mortgage credit will continue to feel the impact on their monthly installments.      

To minimize this impact, the Government will implement some measures related to housing credit, such as:

1. Fixation and reduction of the monthly installments - Available between November 2 and the end of the 1st quarter of 2024, for variable rate (or mixed rate, in a variable period) housing credit contracts for own and permanent housing, concluded by March 15, with a residual term or more than five years, allowing to fix the installment for two years, through the application of an index of 70% of the 6-month Euribor (note that the differential value will have to be reimbursed four years later, diluted by the remaining term of the contract);
2. Temporary interest bonus - It is a reinforcement measure of previous bonus in force, but now calculated on the value of the benchmark above 3%, applicable to households with incomes up to the 6th tier, without differentiation. The bonus is applied in 100% if the effort rate is equal to or greater than 50%, and in 75% when the effort rate is between 30% and 50% (please note that the bonus amount cannot exceed 800 euros).

Mortgage credit: The measures to be in force in 2024

So, how should one prepare for 2024 in terms of housing credit? We provide some tips.  

Are you going to hire a home loan? Evaluate which interest rate to choose

If you intend to get a mortgage in 2024, the key is to search for several financing proposals so you can choose the most suitable one for you.  

When applying for a mortgage, you can choose from three types of interest rates: variable, fixed, or mixed.

The variable rate is indexed to the Euribor, so its value depends on the variations of the Euribor. Since this index has been constantly rising, the variable rates for the Portuguese also rise, with a direct impact on their payments.

A fixed rate assumes that you pay the same fee throughout the entire contract, providing greater security and stability.  

A mixed rate combines both options: it allows for a fixed rate period initially, followed by the remaining term at a variable rate.

Currently, banks are offering lower values of fixed rate for a period, such as two years, then returning to the variable rate. This is so that credit borrowers can have access to the same value, without surprises, while the Euribor continues to rise, and, as soon as it returns to lower values, the variable rate will also decrease.

Therefore, when contracting a home loan, know that this is one of the factors that will most affect the amount you will pay. You should inform yourself beforehand, and do several simulations, also requesting proposals from different banks.

Do you already have a mortgage loan? Transfer it to another bank.

If you already have a home loan, but want to save on the monthly installment, know that there are options: in addition to measures offered by the Government, you can also resort to credit transfer (simultaneously).

With a transfer of housing credit to another bank, you can obtain different conditions, such as changing from a variable to a fixed rate, allowing you to save on this expense.  

In most banks, this process is free, with the only possible cost being a commission for early repayment in your current bank, but this is currently suspended by the Government in variable rate credit contracts.

It is simpler to ask for help from a credit intermediary

Interested in any of the options? A credit intermediary, such as Savings in a Minute, can clarify all your doubts and calm all your anxieties.

Through personalized service, and still at no cost, the agents of Poupança no Minuto handle all the bureaucracy in the credit processes and client communication with the bank.

With the help of a credit intermediary, it is easier to access savings in housing credit! Contact us and start your budget relief as soon as possible.