Portugal Central Bank Cuts Mortgage DTI Cap to 45% as House Prices Jump 17.8%
Updated
Updated · KFGO · Jul 6
Portugal Central Bank Cuts Mortgage DTI Cap to 45% as House Prices Jump 17.8%
3 articles · Updated · KFGO · Jul 6
Summary
Portugal’s central bank told lenders to lower the maximum debt service-to-income ratio for new borrowers to 45% from 50%, one of the first concrete cooling steps in Iberia’s hot housing market.
17.8% house-price growth in Portugal and mortgage lending growth above 10% in the first quarter have heightened scrutiny, while Spain’s prices rose 12.9% and banks there are competing aggressively for mortgage business.
Spain has not moved yet, though supervisors are watching looser lending—especially high loan-to-value mortgages, whose share rose to 15.6% by end-2025 from 10.8% in early 2024.
68.4% average LTV in Spain last year and inflation-adjusted prices still 12.2% below the 2007 peak suggest conditions remain well short of the pre-2008 bubble, with analysts saying tight supply and a strong economy—not credit excess—are driving the boom.