The average maturity of loans in mortgage loans will decrease. Which means you'll have less time to pay off the loan you borrow. The recommendation value, given by Banco de Portugal, will drop to 30 years at the end of 2022.

Based on the Banco de Portugal report, there was a "decrease from 33.5 years to 32.6 years between July 2018 and December 2019." But at the end of last year, it increased again to 33.2 years. All these values ​​are higher than those forecast for the end of next year.

The mortgage loan agreement is usually the biggest commitment that families make. In Portugal, six out of ten mortgage loan contracts expire after retirement age, according to DECO PRO TESTE. The purpose of this recommendation is to prevent people from reaching retirement age while still paying this credit, as incomes then drop significantly and it becomes more difficult to secure benefits. Currently in our country, 35% of home loan consumers are still paying the installments after 70 years of age and 62% after 65.

You should never apply for a mortgage loan in the maximum amount possible, in this case, the future 30 years of recommendation. This is because if something unforeseen occurs and you need to lower the installments, you always have the possibility to increase the payment time, but if it is already set at the maximum, you cannot do it. You should carry out an assessment to find out the longest credit term you can pay according to your income, but try not to reach the maximum amount allowed, avoiding any unexpected situation.

The European Union average for the average maturity of home loans is around 20 to 25 years. Portugal is still far from these numbers, but this Bank of Portugal recommendation seeks to meet the rest of the EU countries, step by step.

Font: Expresso