New housing credit rules come into force on April 1

As of April 1, this Friday, the new recommendation from the Bank of Portugal on the average term of mortgage loan contracts and other loans with a mortgage guarantee or equivalent comes into force.

From April 1st, the maximum term of new housing credit agreements and other credits with mortgage or equivalent guarantee must not exceed 40 years, in the case of customers aged up to 30 years; 37 years for customers between 30 and 35 years old; and 35 years in the case of customers over 35 years of age.

The recommendation in question was adopted and communicated by Banco de Portugal in January, and results from an amendment to the macroprudential measure of the Bank of Portugal on new mortgage and consumer loans, applied since 2018.

This measure implies new limits on various credits that are used by credit institutions when assessing the ability of customers to meet the obligations inherent to the loans.

In the note published this Tuesday, Banco de Portugal states that “these limits were defined with a double objective: on the one hand, to prevent institutions from taking excessive risks in granting credit and, on the other hand, to promote consumer access adequate funding, minimizing the risk of default'.



Source: Vida Imobiliária