(Bloomberg) -- Portugal passed measures to ease the burden on households of higher mortgage bills, with almost nine in 10 loans carrying variable interest rates that have jumped as the European Central Bank raised borrowing costs.
Under the plan, homeowners on such deals can ask their banks to reduce the benchmark six-month Euribor rate used to fix their mortgages by as much as 30% over a two-year period, Finance Minister Fernando Medina told reporters Thursday following a cabinet meeting.
“This will help families withstand this period of very high interest rates,” he said, adding that 900,000 to 1 million families will be eligible.
Lenders may start recovering unpaid interest four years after the two-year period of reduced mortgages ends, according to the minister. The government also approved a suspension on commissions charged by banks for early mortgage repayments.
The ECB raised its deposit rate for the 10th straight time last week, to 4%. Officials have since signaled that this may be the peak, though they envisage borrowing costs remaining at this level for several months.
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