As of tomorrow, the Bank of Portugal's new recommendation on the average terms of housing loan contracts comes into force. Learn all about it.
According to the Bank of Portugal, as of April 1, 2022, the new maximum term for housing credit contracts and other mortgage-backed or equivalent credits must not exceed
- 40 years, in the case of customers aged 30 or less;
- 37 years, in the case of customers over 30 and up to 35 years of age;
- 35 years, in the case of customers over 35 years old.
This recommendation stems from a modification of the Banco de Portugal's macroprudential measure regarding new housing and consumer loans, in application since 2018.
Recall that through this measure, the Bank of Portugal included limits to several criteria that are used by credit entities when analyzing the ability of customers to meet the obligations inherent to the loans.
These limits in question were established with a double purpose:
on the one hand, to prevent entities from taking excessive risks when granting credit,
on the other hand, to promote consumer access to adequate financing by minimizing the risk of default.
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