Portugal’s Storm Kristin Relief: Mortgage and Business Loan Instalments Refunded

The Portugal banking sector has begun refunding every mortgage and business-loan instalment paid after 28 January, a measure designed to put quick cash back in the pockets of households and firms battered by Storm Kristin.

Why This Matters

• Immediate cash-flow relief – refunds land in the same account from which the instalment was debited, usually within 5 banking days after approval.

• Automatic interest freeze – while the 90-day moratorium is active, no late-payment fees or extra spread may be charged.

• Simple deadline – requests can be filed until 27 April; banks must answer within 3 working days.

• Possible 12-month extension – the Government signalled a longer, selective moratorium for the hardest-hit municipalities, pending Bank of Portugal guidelines.

How We Got Here

Storm Kristin ripped through the centre and north of the country during the night of 27 to 28 January, flooding more than 18,000 homes and paralysing 4 industrial parks. Two days later the Portugal Cabinet declared a state of calamity in 26 municipalities and drafted Decree-Law 31-B/2026. The text, in force since 6 February, forces retail banks to offer a retroactive payment holiday on eligible loans and to undo any instalments already debited after the reference date.

The Nuts and Bolts of the Refund

Who qualifies? Borrowers whose properties or business premises lie inside the officially listed calamity zones and who were not more than 90 days in arrears on 28 January.

What gets returned? Both capital and interest portions of instalments paid between 28 January and the moratorium start-date. Debit-order fees are also reversed.

How is it paid? The bank credits the client’s current account; no separate paperwork is needed for the refund once the moratorium request is green-lit.

What about skipped payments? Unpaid amounts are re-spread over the remaining term at the original interest formula, so monthly bills rise only marginally once the pause ends.

Bank-by-Bank Status

• Santander Totta was the first to activate bulk refunds on 5 February.

• Caixa Geral de Depósitos earmarked €300 M to cover refunds and new reconstruction loans.

• Novo Banco, BPI and BBVA confirmed participation and have opened dedicated hotlines; most report approval rates above 80 % for residential customers.The Portugal Banking Association (APB) is coordinating a shared digital form so that borrowers with loans at several institutions file only once.

Oversight and Consumer Protection

The Bank of Portugal has warned lenders that any delay beyond the 3-day assessment window constitutes an administrative offence. Inspectors will sample cases weekly, and a public dashboard tracking refund volumes is expected by mid-March. Consumers can lodge complaints through the Banco de Portugal portal; confirmed breaches carry fines up to €1 M per incident.

What This Means for Residents

• Households can redirect March utility and grocery money previously tied up in loan instalments.

• SMEs facing supply-chain damage gain a 3-month breathing space to rebuild inventory without worrying about loan covenants.

• Those considering selling damaged property should note that the moratorium does not freeze property tax or insurance premiums; separate relief programmes exist at municipal level.

• Expats with euro-indexed mortgages enjoy the same rights as Portuguese nationals as long as the property lies in a calamity zone.

How to Claim in Three Steps

Contact your branch or log into online banking and select the “Moratória Kristin” option.

Upload proof of address (utility bill) and a photo of the property damage or, for businesses, a municipal inspection report.

Monitor your inbox; silence beyond 3 working days counts as tacit approval. Refunds should appear within 5 additional days.

Looking Ahead

The Finance Ministry is drafting a selective 12-month moratorium formula for borrowers whose buildings require structural repairs. Details are due before Easter and will hinge on joint assessments by insurers and municipal engineers. For now, officials advise residents to keep all repair invoices; they may double as eligibility evidence for the longer pause.

Storm Kristin will shape Portugal’s credit landscape for the rest of 2026, but the immediate refund policy buys time at precisely the moment families need it most.