Most Portuguese take out home loans in order to buy their own home; however, from April 2022 access to affordable credit will be even more difficult for people over 30.
The reason is related to the new guidelines of the banking regulatory authority, which is the Bank of Portugal, on mortgage loans that will change the deadlines set for housing loans, depending on the age of the borrower.
This means that the new mortgage for housing will have a maximum repayment period of 40 years, only for young people under 30 years old. So, those who use credit to buy a house aged between 30 and 35 will have 37 years to pay the monthly repayments and for those who are over 35, the term of the bank loan drops to 35 years.
However, these new rules have negative effects for consumers. As experts warn, decreasing the duration will increase the borrower's monthly payments, so the consumer will need to put extra effort into paying housing expenses.
As an example, for those over 35 years old, the time they will have to pay the loan becomes 35 years (five years less than before), taking into account that the age of the oldest member of the household is the one that will account for those numbers.
Maybe the government should impose some sort of price control on property? Some countries do not allow overseas investors to purchase properties, which can also aid in keeping housing affordable. Much needs to be done to make housing affordable and of a good standard here in Portugal.
By Ian from Lisbon on 23 Feb 2022, 08:54
Price controls on property and rentals have historically led to shortages and lower quality housing.
This is only sensible, and people should endeavour to repay mortgages as fast as possible regardless.
By Quentin Ferreira from Lisbon on 01 Mar 2022, 17:19