Installment on a house will increase, and very sharply: within a year, the provision of a loan of 150 thousand euros can increase up to 45%, CNN Portugal pointed out on Monday – in less than two months. Two months later, the European Central Bank (ECB) raised its base interest rates from zero to 1.25%, up 0.75 percentage points over the last week.
Indeed, for a loan of 150 thousand euros, for a period of 30 years, indexed to Euribor for six months, it goes from paying just over 454 euros in April this year to almost 660 euros in April 2023. And this is in a conservative setting.
“We believe we are far from the level that we hope will see inflation return to the medium-term target of 2%,” said Christine Lagarde, President of the ECB, assuring that interest rates will rise even more. “It may be more than two ascents, but it will probably be less than five. I leave it to your discretion whether there will be two, three or four,” he said.
The ECB has already determined its next meetings. Two later this year, in October and December, and two more early next year, in February and March – if interest rates were to rise by 0.25 percentage points at each meeting, what would be the consequences?
In the same example of a loan of 150 thousand euros for 30 years, the monthly payment was 447 euros in October last year. The audit promised in October could increase the contribution to 580 euros per month, with a difference of more than 125 euros per month. At the December meeting, while maintaining the same increase, the contribution will increase to 660 euros plus 200 euros per month, depending on the October values.
