Bloc proposes immediate reduction in interest rates on CGD home loans

This Sunday, the Left Bloc proposed to immediately reduce interest rates on housing loans from the Caixa Geral de Depósitos (CGD) to three percentage points, estimating savings for families of up to 200 euros per month.

“This is a simple, sensible and feasible proposal that does what no one else is proposing in this country: a direct transfer between astronomical bank profits and a reduction in home loan provision,” he said. this Sunday the coordinator of the national party BE, presenting the proposal at the party headquarters in Lisbon.

According to Mariana Mortagua, Caixa Geral de Depósitos “can immediately reduce the installment and interest rate applied to mortgages for the purchase of own and permanent homes to three percentage points from the rates currently in force.”

“You can do this and still continue to generate positive returns while maintaining your capital ratios. You can do this, and in doing so you can bring down the entire private market, helping to lower interest rates and ease the budget of those who have a mortgage, the size of which can vary from 100 to 200 euros, taking into account the payment of each family, the amount owed and the term,” – the leader of the block defended himself.

For BE, “this is the role of the Caixa Geral de Depósitos, which is a state bank and must serve the general interest and the public interest.”

According to Block’s modeling, a 1.5 percentage point reduction in the interest rate on a loan of €150,000 over 30 years would result in monthly savings of €132 and annual savings of €1,588, which would be €174 less over all months or less. €2,086 per year if the reduction is two percentage points.

This measure, he emphasized, “can take effect immediately, without any delay, without any delay, having an immediate impact on the wallets and budgets of those who have mortgages.”

The blockade coordinator said bank profits increased in proportion to the increase in variable interest rates set by the European Central Bank.

“The banks got rich, they accumulated more and more astronomical profits by increasing installment plans to unaffordable values,” Mariana Mortagua emphasized.

The leader cited the example of several banks, in particular Novo Banco, “which was saved with public money” and whose profits rose from 2021 to 2023 from 185 to 743 million euros.

Caixa Geral, “with the largest share of the housing lending market, broke all records for its profits: by September 2023 it amounted to one billion euros” compared to 583 million euros in 2021.

Regarding the impact of this measure on CGD accounts, Bloco’s modeling shows that the bank will “always maintain positive earnings and adequate capitalization levels.”

CGD, Mariana Mortagua said, has a capital ratio of 20%, more than double the regulatory ratio of 9.1%, so “it has enough margin to be able to lower interest rates and ease mortgages.”

If rates were cut by half a percentage point, Caixa would lose €98 million in net profit and the ratio would fall to 19.88%. If rates had been cut by three percentage points, the net result would have been reduced by €587 million and the capital adequacy ratio would have been 18.77%.

This measure does not involve the injection of public money, he emphasized.

“What is at stake is the direction of the state bank, which is owned by the state, to pursue a policy that continues to be a market policy that sets interest rates, simply a policy of lower interest rates relative to competition,” Mortagua explained. .