With the constant rise in interest rates and the consequent increase in house monthly payments, Portuguese people are looking for ways to end this monthly loan..
To help alleviate the burden on families, this year the government approved some support measures for those who have a House Loan, one of which is the possibility to use your retirement saving plan to redeem or pay off your loan..
If until then, redeeming money from your retirement saving plans before the scheduled time could be synonymous with penalties, with Law no. 19/2022 of October 21st, you can now do so, albeit subject to some conditions.
#1 Retirement saving plan bailout without penalty up to the monthly Social Support Index limit
If you subscribed to your savings plan before September 30, 2022, you can redeem 480.43€ of it (monthly social support index limit), and you can use this amount for whatever you want, including amortize your House Loan.
#1 Retirement saving plan bailout without penalty or limit
If you intend to use the money you have in a retirement saving plan to amortize or settle your Home Credit, you can redeem it, in whole or in part, without limits or penalties, as long as the amount is intended to pay off your House Loan debt.
#1 Retirement saving plan bailout without penalty up to 12 social Support Index anual limit
You can also redeem 5,765.16€ (annual limit of 12 social support index) from your retirement saving plan, if you intend to use this money to pay off the debt. This measure is applicable to contracts guaranteed by a mortgage on property intended for primary house and to credit contracts for the construction or improvement of properties with the same purpose.
Terms and conditions
If you are thinking about going ahead with this financial rescue, then you better hurry as the limit to do it is december 31st, 2023Besides, there are some other things you better take into account, namely:
- If you require this financial rescue, be aware that you're exempt from penalties in your income tax stated in art. 21º nº 4 and 5 of the Tax Benefits Statute;
- Your montly social support index is determined by person, which means that even if you hold two retirement saving plans at different banks, you will only be able to redeem the equivalent of one social support index;
- When asking for this financial rescue you must request a declaration which certifies that the amount in question does not exceed the monthly limit.
If you have some money in savings, perhaps this is a good way to invest it, while you see the amount owed on your House Loan decrease substantially or even be stopped.