New mortgage debt-to-income rules in Portugal: what changes in August 2026

Since 1 August 2026, new mortgage applications in Portugal have been assessed under a more demanding macroprudential recommendation from Banco de Portugal.

The main change is straightforward: the recommended limit for the debt-to-income ratio, also known as DSTI, falls from 50% to 45%.

In practical terms, this may reduce the maximum amount some households can borrow, especially when they already have other loans or when the estimated monthly payment is close to the limit.

This guide explains what changed, who may be affected and how to prepare your mortgage application more carefully.

First: is this a law?

Technically, no. It is a Macroprudential Recommendation from Banco de Portugal addressed to financial institutions.

In practice, however, these recommendations have a significant impact: banks are expected to observe them when assessing borrowers' solvency for new credit agreements.

For anyone applying for a mortgage, the result is a more cautious affordability assessment.

What is the debt-to-income ratio?

The debt-to-income ratio measures the percentage of a household's net monthly income used to pay credit instalments.

A simple way to understand it is:

Monthly credit payments ÷ Net monthly income × 100

Example:

Net monthly income: €2,000
Total monthly credit payments: €600

Debt-to-income ratio: 30%

The key point is that the bank does not look only at the new mortgage payment. It also considers other existing credit commitments, such as car loans, credit cards, personal loans or other financing.

In variable-rate or mixed-rate mortgages, the assessment may also include an interest-rate stress scenario to test whether the household could still afford the payment if rates increased.

What changed from 1 August 2026?

The main changes are:

• The recommended DSTI limit falls from 50% to 45%.
• The exception regime is simplified: up to 10% of the total amount of credit granted by each institution, in each half-year period, may exceed the 45% limit.
• Recommended maximum mortgage maturities are simplified into two groups: 40 years for borrowers aged 35 or under and 35 years for borrowers over 35.
• The new rules apply to contracts where the borrower's solvency assessment takes place from 1 August 2026 onwards.

That final date matters. The relevant moment is not only the deed date or the final contract signing date, but when the bank carries out the borrower's solvency assessment.

What does a move from 50% to 45% mean?

The difference may look small, but it can have a real impact on the amount approved.

Imagine a household with net monthly income of €2,000:

In this simplified example, the monthly margin falls by €100. In a mortgage application, that difference may affect the maximum loan amount, the term required or the recommended deposit.

Now imagine a household with net monthly income of €2,500:

Here the difference is €125 per month. For households whose previous simulations were close to the old limit, the new rule may require adjustments.

Who may feel the biggest impact?

This change is most likely to affect:

• Households with other active loans.
• Buyers who were relying on financing close to their maximum capacity.
• Applicants with a limited deposit.
• Households whose payment rises significantly under the interest-rate stress test.
• Buyers looking at properties close to the maximum amount previously accepted by the bank.

This does not mean mortgage approval becomes impossible. It means preparation becomes more important.

What about buyers aged 35 or under?

For borrowers aged 35 or under, the recommended maximum mortgage term becomes 40 years.

This may help some younger buyers, because a longer term reduces the monthly payment. But there is a trade-off: the longer the term, the higher the total cost of credit will usually be over the life of the loan.

In other words, a longer term may improve affordability in the short term, but it should be reviewed together with:

• APR
• total amount payable
• mandatory insurance
• fees
• interest-rate stability
• early repayment flexibility

What should you do before applying?

Before making an offer on a property, it is worth carrying out a realistic assessment of your financial capacity.

1. Calculate your current debt-to-income ratio

Add up all credit instalments you already pay every month and divide the total by your household's net monthly income.

If you are already close to 40% or 45%, your application should be prepared with particular care.

2. Review existing loans

A small personal loan, regular credit-card usage or a car payment can reduce the margin available for a mortgage.

In some cases, it may make sense to repay, settle or reorganise existing credit before moving forward.

3. Simulate different scenarios

Do not rely on a single simulation. Compare:

• different banks
• different maturities
• fixed, variable and mixed rates
• insurance inside and outside the bank
• initial costs and total cost

The spread matters, but it is not the only factor.

4. Pay attention to your deposit

A larger deposit reduces the amount borrowed and may therefore reduce the monthly payment and improve the debt-to-income ratio.

In addition to the deposit, remember to budget for taxes and purchase costs, such as property transfer tax, stamp duty, deed, registration, valuation and insurance.

5. Prepare documents early

The more complete the file is, the easier it is to obtain an accurate assessment.

Banks commonly request:

• identification documents
• proof of income
• tax return
• tax assessment note
• bank statements
• credit liabilities map
• property documentation

Does this prevent approvals above 45%?

Not necessarily. The recommendation allows a limited exception margin, but that margin is managed at the level of each financial institution.

For that reason, it is not prudent to base your plan on an exception. The best approach is to structure the application so that it is comfortably aligned with the recommended criteria.

The role of a credit intermediary

In a more demanding lending environment, comparing proposals becomes even more important.

An authorised credit intermediary can help you:

• estimate your borrowing capacity
• compare proposals from several institutions
• understand the impact of the debt-to-income ratio
• prepare documentation
• review APR, total amount payable, insurance and fees
• follow the process through to completion

At DSIC Seixal Torre da Marinha, we analyse your case free of charge and help you understand which solutions may be available for your profile.

Conclusion

The reduction of the recommended debt-to-income limit from 50% to 45% makes mortgage affordability assessments more prudent.

For some households, the difference will be small. For others, it may affect the maximum approved amount, the deposit required or the type of property to search for.

The best way to deal with this change is to anticipate the analysis: simulate early, review existing commitments, compare banks and make decisions based on the total cost of credit, not just the monthly payment.

This article is for information only and does not replace a personalised assessment or the contractual information provided by financial institutions.

Sources consulted

• Banco de Portugal — Macroprudential Recommendation applicable to new credit agreements with consumers
• ECO — New mortgage debt-to-income rules enter into force