This Saturday, August 1st, marks the entry into force of new directives from the Bank of Portugal regarding the granting of housing and consumer credit.
The main change lies in the tightening of the 'effort rate', the indicator banks use to assess clients' financial capacity. The maximum limit for this rate drops from 50% to 45% of net monthly income, establishing a new general ceiling for housing loan approvals. The calculation considers a higher interest rate scenario, with a simulated increase of 1.5 percentage points, ensuring clients can still afford payments amidst interest rate fluctuations.
Additionally, maximum repayment terms for housing loans have been simplified into two tiers: 40 years for borrowers up to 35 years old and 35 years for those over 35. These changes aim to curb household debt and enhance risk assessment prudence by financial institutions.
