From 1 August, new rules from the Bank of Portugal (BdP) will come into effect in Portugal, which will allow for a brake on the maximum debt-to-income ratio.

On 21 July, the BdP, through the Banks' Survey on the Credit Market, stated that there was a reduction in the demand for housing loans during the second quarter of 2026. The regulator also explained that "the prospects for the housing market and the general level of interest rates contributed slightly to the decrease in loan demand."

The trend is also registered in the eurozone, with the European Central Bank (ECB) revealing that the demand for mortgage loans fell by 15% in the same period.

The phenomenon can be explained by the criteria for granting mortgage loans, which became more restrictive in Portugal in the second quarter of 2026. The Bank of Portugal reveals that the more restrictive criteria result from the general economic situation and the prospects for the housing market, "including the expectation of price evolution, which contributed slightly to more restrictive criteria."

Similar measures were applied by other banks in the eurozone, which moderately restricted the granting of housing loans. In a press release, the ECB reveals that "the perceived risks to the economic outlook and the lower risk tolerance of banks continued to be the main factors contributing to the tightening," reiterating that banks' perceptions continue to be influenced by the political and energy situation in the Middle East.

The Bank of Portugal emphasises that despite more restrictive criteria in Portugal, banks remain competitive with attractive spreads to attract customers, given the high competition in the country.

It is expected that mortgage lending criteria will become somewhat more restrictive during the third quarter of 2026, as reported by the Bank of Portugal, since further measures will come into effect on 1 August that will make loans less accessible.

Main changes

The main change will be a reduction in the maximum debt-to-income ratio from 50% to 45%. The aim is to reduce financial risk, not only for banks but also for families. However, the measure may reduce new home loans by 10 to 15%.