Portugal tightens mortgage rules to protect homebuyers from excessive debt
The Bank of Portugal has announced a change to mortgage rules for families buying a primary home. Starting soon, the maximum debt-to-income ratio will drop from 50% to 45%. The new measure aims to ease the financial strain on homebuyers. By lowering the debt burden threshold, the central bank hopes to make mortgages more manageable. This adjustment applies specifically to loans taken out for a main residence.
Previously, borrowers could allocate up to half their income to mortgage repayments. Now, that limit will be reduced to 45%. The Bank of Portugal believes this will help prevent excessive debt levels among households.
The updated rule will take effect in the coming months. It is designed to improve financial stability for Portuguese families purchasing a home. Lenders will now assess mortgage applications under the stricter income-to-debt criteria.
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