New mortgage maturities – The Portugal News
Mortgage payment terms will be shorter. The new mortgages reimbursed in 40 years will only be granted to young people under 30 years of age.
Most Portuguese people take out mortgages to buy their own house; however, from April 2022, access to affordable credit will be even more difficult for people over 30.
The reason has to do with the new directives of the banking regulatory authority, which is the Bank of Portugal, on mortgage loans which will modify the deadlines set for home loans, depending on the age of the borrower.
This means that the new mortgage for housing will have a maximum repayment term of 40 years, only for young people under 30. Thus, those who use credit to buy a house between the ages of 30 and 35 will have 37 years to pay the monthly repayments and for those who are over 35, the duration of the bank loan increases to 35 years.
However, these new rules have negative effects for consumers. As experts warn, decreasing the term will increase the borrower’s monthly payments, so the consumer will have to put in extra effort to pay for housing expenses.
For example, for those over 35, the time they will have to repay the loan increases to 35 years (five years less than before), taking into account that the age of the oldest member household is the one who will count for these figures.