Bank of Portugal considers tightening mortgage debt limits
The Bank of Portugal is consulting with financial institutions on a proposal to reduce the maximum debt-to-income ratio for new home loans from 50% to 45%. This macroprudential measure aims to curb excessive household debt and ensure long-term financial stability in the housing market.
Banco de Portugal is Portugal's central bank, founded in 1846. It is a member of the European System of Central Banks (ESCB) and the Eurosystem, working alongside the European Central Bank (ECB) to implement monetary policy in the euro area.
Its main functions include supervising banks and financial institutions, ensuring financial stability, managing Portugal's gold and foreign currency reserves, and producing economic research and statistics. It also operates the payment systems infrastructure and issues banknotes.
Banco de Portugal is led by a Governor — currently Mário Centeno (since 2020) — who also sits on the ECB's Governing Council. For residents, the central bank matters because it regulates the banks they use, sets macroprudential rules (such as mortgage lending limits), and provides a complaints mechanism for banking disputes.
