New mortgage rules for 30s age group

 In Bank of Portugal, Mortgage lending, News

The Bank of Portugal has tightened up access to mortgages for those who are in their 30s.

From today (Friday, 1 April) new recommendations come into force regarding the maximum age limit for new home loan applicants, but only for customers over 30.
From today, applicants who are between 31-35 will only be able to get mortgages for a maximum limit of 37 years, while for over the over 35s, the mortgage maturity limit is 35 years. For 30-year-olds the regime limit the same at a 40-year maximum contract.
However, couples who apply to a bank for a mortgage will find the length of the contract is based on the age of the oldest applicant of the couple.
These recommendations are aimed at banks which now have to provide the Bank of Portugal with an explanation if they make exceptions and exceed the suggested limits.
The aim is to encourage the banks to adopt more selective and prudent criteria when deciding who gets and who does not get a mortgage and for how long, thereby improving the resilience of the financial sector, as well as customer access to sustainable finance.
The regulator also justified the macro-prudential measure with the need for “convergence in the average maturity of new mortgage contracts to 30 years by the end of 2022”.