Banks seek longer terms for mortgage lengths

Portugal’s banks will ask the sector regulator to be more flexible on the maximum terms on mortgage lengths in cases where mortgage contracts have been rescheduled to help families in difficulties meeting repayments because of high interest rates.

The idea was conveyed to the Bank of Portugal (BoP) by the Portuguese banking association Associação Portuguesa de Bancos (APB) during a period of public consultation regarding the relaxing of the criteria to test the capacity of families to pay their mortgages when applying for a mortgage, a criteria that came into force this week.
Portugal’s main banks rescheduled 62,000 mortgages to June worth €5Bn, with around 90% of the rescheduling made on the initiative of the association.
The APB, which is led by Vítor Bento, is of the opinion that families that are getting into difficulties would have the “most suitable solutions” if the supervisor’s recommendations on the limits of mortgage expiries were reconsidered”.
In practice, the banks are suggesting that the maturity deadlines are extended beyond current limits recommended by the central bank in the case of families in dire straights having to ask for their mortgages to be rescheduled.