Perfil de risco de clientes em crédito habitação melhorou em 2023

Risk profile of housing credit customers improved in 2023.

According to the Bank of Portugal (BdP), the profile of customers who took out home loans in 2023 was, for the most part, low-risk. Understand what is at stake.

04 Apr 20243 min

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Mortgage credit: 61% in 2023 were low-risk customers.

The Bank of Portugal (BdP) released information: In 2023, the profile of risk of new housing credit customers improved, with 61% of contracts being signed by low-risk clients.

The data was presented in the BdP's macroprudential recommendations monitoring report, quoted in a Notícias ao Minuto news article, revealing that "since 2018, there has been an improvement in the risk profile of borrowers taking out housing loans".

The growth of contracts granted to low-risk customers was visible, as it increased from 49% in 2022 to 61% in 2023, in a year marked by rising interest rates and housing prices.

In these data, housing credit transfers between banks are included, with 2023 being an exceptional year with an increase in transfers, making the customer profile "not directly comparable to previous years."  

But what does a low risk client mean? It is defined by a debt-to-income ratio lower or equal to 50% and a Loan-to-value (LTV) ratio – amount borrowed by the bank compared to the house value – lower or equal to 80%.

In 2023, customers with high risk (effort rate exceeding 60% and LTV ratio exceeding 90%) represented only 3% of the total, and customers with intermediate risk 36% of the total.

The weighted average maturity of new mortgage loans in December 2023 was 30.6 years - leading the BdP to conclude that banks are complying with the recommendation to converge the average maturity to 30 years. However, it should be noted that in the European Union (EU), Portugal still has one of the highest maturities in new mortgage contracts. This is because in the other EU countries, the average maturity ranges between 20 and 27 years.

The long deadlines for mortgage credit aim to evaluate the customer's ability to continue paying the loan and interest rates rise. 

With the increase in interest rates in 2023, the BdP reduced the stress test required of customers from 3% to 1.5% to facilitate access to housing credit. Although it maintained criteria from the 2018 macroprudential measure, such as financing term limits, as well as the ratio between the amount of credit and the amount of the property being used as collateral.

In 2024 if you want to hire a home loan, contact a credit intermediary! The agents of Poupança no Minuto offer free services to find the best financing proposal among several banks, and the one that suits you best! Contact us to learn more.

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