Getting a Mortgage in Portugal: Bank of Portugal Limits Explained

Home loans in Portugal follow a Banco de Portugal recommendation that caps loans at 90% of the property’s value for your own permanent home and 80% for other homes, limits total loan repayments to 45% of net income, and sets maximum terms of 40 years for borrowers aged up to 35 and 35 years for older borrowers. The 45% limit applies to loans assessed from 1 August 2026.

The rules come from Macroprudential Recommendation 1/2026, which replaced the 2018 recommendation. The central bank calls them recommendations, but it adopts them as the national macroprudential authority and monitors how banks comply. Everything below is as of November 2026 and is general information, not advice on a particular loan.

How much will a Portuguese bank lend me?

The loan-to-value (LTV) limit depends on what the loan is for, not on who you are.

The LTV is calculated on the lower of the purchase price and the bank’s valuation. In practice you need savings for the deposit plus the purchase taxes and costs, unless you qualify for the state guarantee described below. The full text is in the Banco de Portugal Macroprudential Recommendation 1/2026.

What changed in 2026?

The 2026 recommendation made three main changes for home loans that took effect on 1 August 2026:

• the DSTI limit fell from 50% to 45%;
• the share of loans that may exceed the DSTI limit fell from 15% to 10% of each bank’s lending per half-year, and banks must justify those exceptions;
• the rule on the average maturity of each bank’s loans was dropped and replaced by two simple maximum terms, by the borrower’s age.

The 100% LTV limit that applied to properties sold by banks from their own balance sheets was also removed, so those homes now follow the general 90% and 80% limits.

How is the 45% repayment limit tested?

The bank adds the monthly payments on every loan you have, including car and personal loans, and divides by your monthly income. For a new loan, the payment is calculated as if interest rates had risen, under the stress test set by Banco de Portugal Instruction 23/2023.

• Annual income is divided by 12, so the 13th and 14th month payments count.
• If a borrower will be over 70 at the end of the loan, the bank should assume income falls by at least 20% for the years after 70, unless the borrower is already retired.
• Each bank also applies its own credit policy, which can be stricter than these limits.

What is the state guarantee for buyers under 35?

Young buyers can get a public guarantee that lets a bank lend up to 100% of the price. According to the government’s explainer on the public guarantee, the conditions are:

• age 18 to 35 and a tax address in Portugal;
• income no higher than the eighth IRS bracket;
• a first, permanent home costing no more than €450,000;
• no full or partial ownership of any other home, and every buyer must be a borrower who meets the conditions;
• no debts to Finanças or Social Security.

The state guarantees up to 15% of the initial loan for 10 years. Credit contracts must be signed by 31 December 2026, when the measure ends unless the government extends it. The bank still applies its normal risk checks and the 45% DSTI limit, and participating banks are listed by government order.

Should I choose a variable or fixed rate?

Variable-rate loans in Portugal are usually tied to a Euribor index plus a fixed bank margin (spread), so the payment changes when the index is reset. Fixed-rate and mixed loans, with a fixed period followed by a variable one, are also offered.

1. Ask each bank for the standardized European information sheet (Ficha de Informação Normalizada Europeia, FINE), which shows the rate, the APR (TAEG) and every cost.
2. Compare the spread, the fixed-rate period and the fees for early repayment.
3. Check how much the payment would rise under a higher rate, using the bank’s simulation.
4. Read the conditions linked to the spread, such as salary transfer or insurance bought from the bank.

Can non-residents get a mortgage in Portugal?

Yes. The recommendation applies to banks lending in Portugal and sets no nationality or residence condition of its own. A non-resident buying a holiday home is in the “other purposes” category, so the cap is 80% of value, and banks set their own rules on foreign income and documents.

You will need a Portuguese tax number and usually a Portuguese bank account; see our guides to the NIF and to opening a bank account.

Which insurance do I need?

Banks normally ask for life insurance on the borrowers and home insurance on the property. In an apartment building, the Civil Code makes fire insurance compulsory for each unit and the common parts. You can compare insurers rather than taking the bank’s offer, but check whether the bank’s spread depends on buying its own policy.

Bottom line

Work out your maximum payment as 45% of net monthly income, minus every other loan, before you visit a bank, because that number now limits more buyers than the 90% LTV does. Budget separately for IMT and stamp duty, which the loan does not cover; our guide to taxes when buying property has the rates.

FAQ

Is the 90% LTV a legal maximum?

It is a Banco de Portugal recommendation that banks in Portugal are expected to follow. Banks can lend less, and many ask for more savings from riskier borrowers.

Can I get a 40-year mortgage at 40?

Not under the recommendation. Borrowers over 35 have a maximum term of 35 years; with two borrowers, the age of the older one counts.

Does the 45% limit include my car loan?

Yes. The calculation includes payments on all existing loans with a set repayment plan, plus the new mortgage.

Do I need a Portuguese salary?

The rules do not require one, but the bank must be able to assess and verify your income. Ask each bank which foreign income documents it accepts.