Around 24% of new credit operations for permanent home ownership had financing above 90%, driven by the public guarantee, in an amount equivalent to that prior to the entry into force of macroprudential measures, the Bank of Portugal announced this Monday, March 30th.
This increase appears in the monitoring report on macroprudential measures in Portugal for 2025 and is mainly due to the public guarantee for the purchase of a home for young people up to 35 years of age.
“This increase results from credits granted under the State guarantee, established by Decree-Law No. 44/2024, in which 85% of loans had an LTV index [loan-to-value] 100%”, explains the BdP in the document.
The LTV ratio results from the relationship between the total amount of credit for a property and the minimum of the appraised value or the acquisition price.
In the total number of mortgages granted last year, the weight of new loans with an LTV index above 90% “increased from a residual value (0.1%) in 2024, to 19%”.
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