Pressure to buy a house. Families ask for more, pay higher installments and avoid construction

On average, families borrowed 186,000 euros from banks between January and June this year. According to a study by the portal ComparaJá, they increasingly ask for the maximum allowed, 90% of the property valuation. The impact is felt in the amount payable each month in the new contracts, now at an average of 575 euros. Only a small slice escapes the new restrictions of the Bank of Portugal and gets a 40-year loan. And most will reach the renovation with part of the house unpaid

Families are asking banks for more money to buy a house and paying higher installments. The conclusions are from the latest Housing Credit barometer from the ComparaJá portal, shared with CNN Portugal, which based the analysis on a universe of seven thousand users who used the comparator.

In the first six months of this year, each household asked, on average, 186 thousand euros from the bank. That’s 48 thousand euros more than the one registered a year earlier, mainly reflecting the greater demand for more expensive houses.

Just over half (56%) of families do not spend more than 175,000 euros when asking banks for money. One in four is in the range between 125 and 175 thousand euros, representing the largest share.

Given this scenario, the study confirms that families are also paying higher installments in new contracts: in the analyzed period, the average was 575 euros. The most recurrent installment scale is between 400 and 549 euros, being a reality for practically three out of 10 families.

Less construction (at the expense of inflation)

According to ComparaJá, eight out of 10 credits were for the purchase of property. Also noteworthy is the fact that there are fewer Portuguese asking for credit to build a house: in the space of a year, this proportion dropped from 18% to 8%. Rising inflation, with an impact on material costs, helps to explain the scenario.

For different purposes, families are increasingly asking for the maximum allowable funding. The barometer shows that almost 67% requested a ratio corresponding to 90% of the bank’s assessment of the property, which serves as a guarantee for the loan.

Families apply for a loan late (and only end it in retirement)

In April, the new rules of the Bank of Portugal came into force, meaning that only those who ask for it under the age of 30 have access to a 40-year loan. ComparaJá’s analysis shows that only two out of 10 credits are taken out by people under the age of 30. That is, only a small slice escapes the new restrictions.

Practically half use banks for this purpose between the ages of 26 and 35. Over 40 years, 25% of candidates.

Four out of 10 credits have a maturity between 36 and 40 years, the latter being the limit defined by the regulator and which now only applies to those under 30 years of age. Only a tiny part (5%) of the contracts have a short duration, being paid in full in less than 15 years.

Deadlines that lead the portal ComparaJá to advance that only 22% of Portuguese will be able to repay the credit before entering retirement age. Almost 50%, he says, “will only finish paying the mortgage after 70 years of age”.