Your salary buys less house as of today

If you are thinking about buying a home in Portugal, the rules changed today, and not in your favour. It's Saturday, 1 August. Thirty degrees. Air quality: 32 (Good). Here's what you need to know.

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NEW MORTGAGE RULES START TODAY, AND THEY WILL SHRINK WHAT THE BANK WILL LEND YOU

From today, 1 August, it gets harder to borrow for a home in Portugal. The Banco de Portugal, the country's central bank, has tightened the rules banks must follow when they decide how much to lend, and the change lands on anyone whose loan application is assessed from today onwards.

The core of it is a number called the debt-service-to-income ratio, or DSTI. It is the share of a household's monthly take-home pay that can go towards repaying all its loans put together, mortgage and everything else. Until now the recommended ceiling was 50%. From today it drops to 45%.

That five-point cut is easy to underestimate. Take a household bringing in €2,500 net a month. Under the old 50% ceiling, up to €1,250 of that could go to loan repayments. Under the new 45% one, it is €1,125. Those hundred-odd euros a month are the difference that, spread across a 30-year mortgage, can knock tens of thousands off the sum a bank is willing to hand over. If you already carry a car loan or other credit, it bites harder, because the ratio counts all of it together.

Banks are not forbidden from lending above the line, but the room they have to do it is narrower. The slice of new lending they can write above the 45% ceiling shrinks from 15% to 10% every six months, and they now have to justify each exception. So the borderline cases, the households already stretched, are the ones most likely to hear no.

There is a sweetener buried in the same rules. The recommended maximum loan term is now simplified to 40 years for borrowers aged 35 or under, and 35 years for those over 35. A longer term means lower monthly payments, which can help a younger buyer squeeze under the new ceiling, though it also means paying interest for longer.

What this means for you: if you are house-hunting, get your paperwork in front of a bank knowing the goalposts have moved. The same salary buys a smaller loan than it did yesterday, and if your application is assessed from today it falls under the new rules, not the old ones. It is worth running your numbers again before you commit to an offer, and worth clearing other debts first if you can, since they now eat directly into what you can borrow for the house.

Bottom line: these are still officially recommendations rather than hard law, and banks can bend them within limits. But the central bank has said it wants them made binding, and the International Monetary Fund agrees, so treat the 45% ceiling as the new reality rather than a suggestion. The era of stretching to the absolute limit to get into the Lisbon market just got harder.

⚡ QUICK HITS

One of Lisbon's busiest metro stations shuts for nearly three weeks from Friday. Cais do Sodré closes to the public from 8 to 26 August for railway signalling work, reopening on 27 August. During the closure, the Green Line runs only between Telheiras and Baixa-Chiado in both directions, so it will not reach Cais do Sodré at all. For the riverside, the nearest metro alternative is Terreiro do Paço on the Blue Line, and Carris buses cover the gap, including the 758 from Chiado and lines 728, 735, 781 and 782 from Praça do Comércio. The work is groundwork for the future Circular Line, which will link the Green and Yellow lines through two new stations, Estrela and Santos, and is due to start running in early 2027. The ferry terminal and suburban trains at Cais do Sodré are not affected.

The Azores tourism slump has now run for nine straight months. Visitor numbers to the islands have fallen every month since Ryanair pulled out of the region at the end of March, taking around 400,000 seats a year with it. The airline blamed a steep rise in airport charges and a new travel tax. With flights now concentrated on TAP and the regional carrier SATA, fares have climbed and the islands have become a costlier trip from the mainland. The regional government has put money into recruiting new carriers, and the route map is set to broaden for winter, but the immediate hit to one of Portugal's most affordable domestic escapes has been real.

Portugal had the worst flight delays in Europe this summer, and many come with money attached. New analysis from the passenger-rights company AirHelp found Portugal recorded the highest average flight delays of any European country, with the crush worst at Lisbon, Porto and Faro. The useful part: under European air passenger rights rules, known as EC261, if your flight arrives more than three hours late and the cause was within the airline's control, such as crew scheduling, a technical fault or a late aircraft, you can claim compensation of up to €600. Weather and air traffic control delays are exempt. Keep your boarding pass, your booking confirmation and any delay notice the airline sent, since claim windows run to several years and you can file directly with the airline for free.

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🍽️ SPOT OF THE DAY

ONDA COCKTAIL ROOM (GRAÇA)

Onda is easy to walk straight past, which is part of the point. A small room with the door open to the street on Rua Damasceno Monteiro, up in Graça, it seats around fourteen people and is run by a husband-and-wife team, Peter O'Connor and Joana Jaeger. He manages the drinks, she runs the room, and between them they turned a bar most people had never heard of into Time Out Lisbon's Bar of the Year.

This is not a place for a quick pint. The house approach is what they call the Flavour Discovery menu, cocktails built around a specific idea or ingredient and balanced like courses rather than knocked together at speed. The signature option is the tasting menu: a sequence of small cocktails served the way a restaurant runs a tasting, so you end up somewhere you would not have ordered your way to. The menu changes, so the best move is to tell them what you like and let them steer.

Before you go, you should know, it is closed on Wednesdays, the room is tiny, and reservations are strongly advised, especially at weekends, because a handful of walk-ins fills it. It is not a cheap round, but the care that goes into each drink is the whole point.

→ See the menu and find them here ←

Insider tip: come early on a weekday if you want Peter to talk you through the menu properly. Once the room fills, that unhurried version is harder to get.

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