Property: Mortgage news in Portugal

Starting this Saturday, new macroprudential measures from the Bank of Portugal (Banco de Portugal) will lower the debt-to-income ratio for mortgage applicants to 45%. While the move aims to protect buyers, banking leaders like Paulo Macedo, CEO of Caixa Geral de Depósitos, anticipate a potential 10% drop in credit production. Experts advise applicants to prepare complete dossiers and consult multiple institutions to navigate the stricter approval environment.

The state-owned bank Caixa Geral de Depósitos (CGD) recorded a profit of 913 million euros in the first half of 2026, a 2.2% increase compared to the same period last year. CEO Paulo Macedo noted that the bank has provided 2.5 billion euros in loans to young people under the state guarantee scheme since January 2025. Additionally, home loan approvals saw a significant year-on-year increase of 42%.

Despite signs that Euribor rates have peaked and are stabilizing, mortgage holders in Portugal will face higher monthly repayments for contracts reviewed in July. While the pace of rate increases slowed in June, the impact remains a financial concern for many families.

The BdP has reduced the maximum debt-to-income ratio (DSTI) for home loans from 50% to 45% to curb high-risk lending. Industry analysts estimate this change could lead to the rejection of 10% to 15% of mortgage applications that would have previously been approved. The government has introduced a public guarantee (Garantia Pública) to help mitigate these impacts for younger buyers.

Homeowners with variable-rate mortgages in Portugal will see monthly payments increase by up to 60 euros starting in June. The rise reflects ongoing adjustments in interest rate benchmarks affecting housing credit costs.

Miguel Maya, CEO of Banco Comercial Português (BCP), expressed support for a potential move by the Bank of Portugal (Banco de Portugal or BdP) to lower the debt-to-income ratio for housing loans. The measure aims to ensure families maintain financial stability and a safety buffer amidst current economic unpredictability.

Homeowners with a mortgage (crédito habitação) that is due for review in April will see an increase in their monthly bank repayments. While the impact on very recent contracts may be limited, those with older variable-rate agreements face higher costs due to interest rate trends. Mortgage-holders should note that many younger borrowers are increasingly opting for mixed interest rates (taxas mistas) to ensure more predictable monthly costs.