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New Housing Credit rules in force since 1 July 2018
Banco de Portugal takes action to the new housing and consumption credits.
This measure shall apply to contracts concluded from 1 July 2018 and covers all credit institutions and financial corporations, with their head office or branch office in national territory, authorized to grant this type of credit in Portugal.
Are three types of limits:
- The ratio between the amount of the loan and the value of the property given as guarantee (LTV- loan-to-value):
- of 90% for loans for personal and permanent residence;
- of 80% for credits with other purposes than a personal and permanent residence;
- of 100% for credits for acquisition of properties held by the institutions and for real estate financial leasing contracts.
- of 50%, the ratio between the amount of the monthly benefit calculated on all loans of the borrower and your income (DSTI- debt service-to-income ratio), with the following exceptions:
- up to 20% of the total amount of credit granted by each institution covered by this measure, in each year, can be granted to borrowers with DSTI to 60%;
- up to 5% of the total amount of credit granted by each institution covered by this measure, in each year, exceed the limits of the DSTI.
For the calculation of the DSTI, benefits the monthly new credit agreement must be calculated assuming that are constant throughout the term of the contract. In the case of variable interest rate contracts and mixed, it should be considered the impact of an increase in the interest rate. In calculating the DSTI, should still be accounted for a reduction of income of the borrower(s) when, at the end of the agreement, the borrower has more than 70 years of age, unless, at the time of the evaluation of the creditworthiness, the borrower is already in retirement.