Bank of Portugal (BdP) Recommendation no. 1/2026 is now in force: it applies to credit agreements whose solvency assessment is carried out from 1 August 2026. The maximum stress ratio (DSTI) has gone from 50% to 45%, and it applies to all mortgages, not only to young buyers with the State guarantee.
What is the stress ratio (DSTI) and why does it matter?
DSTI — Debt Service-to-Income — measures the share of a household's net monthly income that goes towards all loan repayments. It's one of the main indicators banks use to assess whether a client can afford a new loan.
- Up to 35% — considered a comfortable profile by banks
- Between 35% and 45% — acceptable zone, with closer analysis
- Above 45% — outside the maximum limit set by the BdP
What does Recommendation 1/2026 say?
- The maximum DSTI is 45% of the household's net income
- It applies to agreements with a solvency assessment carried out from 1 August 2026
- Exceptions are limited to 10% of the credit each bank grants, per semester
In practice, exceptions exist but they are few, and each bank manages its own quota. Don't count on one to get a file above 45% approved.
Why did the BdP change the rule?
The trigger was the introduction of the 100% State-backed guarantee for young buyers accessing mortgages. By removing the need for a down payment, the measure led banks to lend to clients with higher stress ratios, since the default risk was covered by the State.
The BdP chose not to create a separate rule only for State-guaranteed loans. It adjusted the Macroprudential Recommendation as a whole, so the new limit applies to every new mortgage application.
What changes in practice for buyers?
- Lower buying power for households with tighter incomes
- Far less room for exceptions
- More weight on documented net income and professional stability
- "Stretched" applications are harder to get approved
- Greater role for solutions such as adding co-borrowers, consolidating debt or reducing existing commitments
What to do if your file is borderline today
- Work out your real DSTI, with every current repayment and the simulated payment of the new mortgage
- Pay off or reduce personal loans, car finance and credit cards before you apply
- Put down a larger deposit to lower the loan amount and the monthly payment
- Consider a longer term, within the maximum allowed, to reduce the monthly payment
- Add a second borrower with documented income, if it makes sense for your situation
- Gather every income you can prove: allowances, rental income and foreign income count if they are well documented; long-term rental income is usually counted at 70%
- Compare several banks: how income is assessed and how much exception quota is left varies from bank to bank
With the cap at 45%, how well your file is prepared matters more than ever. If your DSTI is close to the limit, talk to us: we review your case free of charge and tell you what to adjust before it goes to the banks.