&NewLine;<p>Interest rates have been negative in recent years, enabling consumers in Portugal to access credit at lower cost. However, the recent rise in inflation in the European zone has rekindled fears of an inflexion in interest rates;However&comma; the recent rise in inflation in the European zone has rekindled fears of an inflexion in interest rates&comma; which have begun an upward trajectory in recent months, accentuated by the outbreak of military conflict in Eastern Europe&period;&nbsp&semi;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Five years later&comma; Euribor reached positive indices on April 12&period; Economists had been predicting this for a long time&period; All that remained was to find out when&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<h2 class="wp-block-heading">Are mortgage interest rates set to rise in Portugal &quest;</h2>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Who decides whether to raise or lower the &quest interest rate?</h3>&NewLine;&NewLine;&NewLine;&NewLine;<p>At each monthly meeting of the European Central Bank, it may be decided to maintain or modify the key interest rate that the ECB charges banks for lending them money. A possible revision of this rate influences all credit contracts between banking institutions, which define the Euribor&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;&NewLine;<p>The last revision took place in September 2019&comma; when the deposit rate fell to -0&comma;5 &percnt;&period; The key rate&comma; meanwhile&comma; was parked at 0 &percnt; in March 2016 and has remained unchanged since&period; However&comma; market dynamics and expectations regarding the&rsquo&semi;evolution of economic indicators also influence rates <a href="https://www.euribor-rates.eu/pt/taxas-euribor-actuais/" target="_blank" rel="noreferrer noopener">Euribor</a> set by European banks&comma; who seek to anticipate the next steps in monetary policy&period; In the end&comma; it is these rates that directly influence variable-rate credit contracts&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Why has&rsquo&semi;inflation risen &quest;</h3>&NewLine;&NewLine;&NewLine;&NewLine;<p>Several factors have contributed to this scenario&period; One of them is the rise in the price of oil and energy in general&period; The military conflict in Ukraine was a major contributor&period; On the other hand&comma; the expansionary monetary policies of recent years have led to an excess of liquidity on the market&comma; this was without taking into account the emergence of a pandemic in 2020 and its immense impact on global production and distribution chains&period; Inflation has&comma; actually&comma; increased&period; Average inflation in the eurozone reached 7&comma;5 &percnt; in March&period; In Portugal&comma; the rate of&rsquo&semi;inflation was 5&comma;3 &percnt;&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Is it inevitable to correct rising inflation by raising interest rates?</h3>&NewLine;&NewLine;&NewLine;&NewLine;<p>It&rsquo&semi;is the classic response to the scenarios of&rsquo&semi;inflation&comma; but a very important variation could have harmful consequences in the current economic context&period; The indebtedness of the countries&comma; as well as of the families&comma; is at very high levels and the economic recovery of the companies is still very weak&comma; in particular because the <a href="https://vivreauportugalconsulting.com/hausse-pib-portugais/" data-type="post" data-id="8716">pandemic</a> has led to serious constraints on the activities of many institutions over the past two years&period;&nbsp&semi;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>On the other hand&comma; the rise in&rsquo&semi;inflation&comma; which has led to a general increase in prices&comma; is not accompanied by wage increases&comma; which reduces consumers&rsquo&semi;purchasing power&period; A correction in the interest rate is admissible&comma; but it should be very slight and in small, gradual doses&period; This movement is already anticipated on the financial markets&comma; influencing the&rsquo&semi;Euribor&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">Will Euribor rise &quest;</h3>&NewLine;&NewLine;&NewLine;&NewLine;<p>Interest rates are strengthening their upward trajectory begun in recent months&period; We accept that&rsquo&semi;an increase in ECB benchmark rates could occur in the coming months&period; Currently&comma; the&rsquo&semi;Euribor 12 months has already reached positive values&comma; while the&rsquo&semi;Euribor 6 months is around -0&comma;3&percnt; and we consider that&rsquo&semi;a rise of 0&comma;5 or 1 percentage point until&rsquo&semi;the end of the year is plausible&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<h4 class="wp-block-heading">Will mortgage payments increase &quest;</h4>&NewLine;&NewLine;&NewLine;&NewLine;<p>Yes&comma; it seems inevitable to us that this will happen in the coming months&period; Here are some scenarios for consumers with mortgage contracts with a spread of 1&percnt; and the&rsquo&semi;Euribor 6 months&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p><strong>100,000 euros for 30 years</strong></p>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>Average current payment with Euribor -0&comma;3&percnt; &colon; 308&comma;05 euros</li><li>Average payment with Euribor at 0&percnt; &colon; 321&comma;64 euros</li><li>Average repayment with Euribor 1&percnt; &colon; 369&comma;62 euros</li></ul>&NewLine;&NewLine;&NewLine;&NewLine;<p><strong>150,000 &dollar; 30-year term</strong></p>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>Current average Euribor payment -0&comma;3&percnt; &colon; 462&comma;07 €&period;</li><li>Average payment with Euribor at 0&percnt; &colon; 482&comma;46 €&period;</li><li>Average payment with Euribor 1&percnt; &colon; 554&comma;43 €&period;</li></ul>&NewLine;&NewLine;&NewLine;&NewLine;<p><strong>200,000 30-year term</strong></p>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list"><li>Current average Euribor payment -0&comma;3&percnt; &colon; 616&comma;09 €&period;</li><li>Average payment with Euribor at 0&percnt; &colon; 643&comma;28 €&period;</li><li>Average repayment with Euribor 1 739&comma;24 euros</li></ul>&NewLine;
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