The Banco de Portugal publishes today the Macroprudential recommendation on new credit agreements for consumers – progress report. 

The report concludes that compliance with this measure was broad-based: in 2021 credit institutions continued to observe the guidelines on the loan-to-value (LTV) ratio, the debt service-to-income (DSTI) ratio, the maximum maturity for credit for house purchase and consumer credit, and regular interest and principal payments. 

Although the upper limit for the maturity of new credit for house purchase is being complied with, the average maturity of new credit for house purchase as at December 2021 was set at around 32.5 years, remaining significantly above 30 years, a threshold to be reached by the end of 2022. 

With the purpose of promoting the gradual convergence of the average maturity towards this threshold, in January 2022 the Banco de Portugal amended the recommendation, with the maximum maturity of new credit agreements for house purchase being dependent on the borrowers’ age.

Hence, with effect from 1 April 2022 the Banco de Portugal recommends the following limits to the maximum maturity of new credit agreements for house purchase: 40 years for borrowers aged 30 or under; 37 years for borrowers aged over 30 and up to and including 35; and 35 years for borrowers aged over 35.