Housing loan for 30, 35 or 40 years: which term is more advantageous?

Choose the housing loan term is a decision that can affect both the monthly payment and the total cost of the financing. A longer term may reduce the payment amount, but also means keeping the loan longer and, in general, paying more interest.

In addition, the rules about the maximum term for new housing credits were simplified in August 2026.

Currently, housing credit contracts can have a maximum term of 40 years for customers up to 35 years old, inclusive, and 35 years for customers over 35 years old.

But the maximum term applicable to your case may be lower, depending on the age of the older proposer and the criteria defined by the credit institution.

Therefore, before choosing between 30, 35 or 40 years, it is important to understand which term you can actually get and the impact of this choice on the installment and total cost of the loan.

What is the maximum term for a housing loan?

Since August 1, 2026, the maximum maturity limits of new housing credit contracts became:

This change simplified the rules that previously distinguished three age groups.

So, a customer aged 34 or 35 can, under the applicable conditions, have a loan with a maximum term of 40 years. For those over 35, the maximum term becomes 35 years.

When there are multiple proposers, the relevant age is that of the oldest proposer.

Is there an age limit at the end of the credit?

Yes, but it is important to distinguish the two rules.

The maximum term set by Banco de Portugal is one thing. The maximum age the bank accepts for the oldest applicant at the end of the contract is another.

In practice, many banks set an age limit at the end of the loan, often 75 years, although this criterion may vary between institutions.

For example, if an institution sets a limit of 75 years:

• A 40-year-old customer may have a term up to 35 years under this criterion.
• A 50-year-old customer may have up to 25 years under this criterion.
• A 60-year-old customer may have a term of up to 15 years under this criterion.

In practice, the available term will be conditioned by the most restrictive limit between the maximum applicable term and the maximum age allowed by the bank at the end of the contract.

Longer term means lower payment?

In general, yes.

By spreading the capital payment over more years, the monthly installment tends to be lower, keeping the remaining financing conditions constant.

However, there is another side to the equation: the longer you keep the credit, the higher the total amount of interest paid.

That's why a lower payment doesn't necessarily mean a cheaper loan.

When comparing different terms, you should analyze:

• Monthly payment
• Total interest
• Fees associated with credit
• Total cost of financing
• Contract duration

Home loan for 30, 35 or 40 years: which to choose?

There is no ideal deadline for all customers.

The choice depends on age, income, financed amount, payment you can afford, and total financing cost.

Moreover, age can limit the available term from the start.

Home loan for 30 years

A 30-year term allows spreading the financing over a significant period, but shorter than the maximum terms of 35 or 40 years.

Can be an option for those who:

• Can handle a higher monthly payment
• Wants to finish the loan earlier
• Want to reduce the period during which you pay interest
• Has financial room for a better payment

Com a longer term, the installment will be higher, but the payment period will be shorter.

Home loan for 35 years

A 35-year term allows spreading the loan payment over a longer period than a 30-year term.

As a result, the monthly payment tends to be lower, although the total interest cost may be higher.

For customers over 35 years old, 35 is the maximum term set for new housing loans.

Still, the age of the older proposer may make the effectively available term shorter.

Home loan for 40 years

A 40-year term allows spreading the loan payment over a longer period, and keeping the remaining conditions, may result in a lower monthly payment.

Since August 2026, the maximum term of 40 years applies to customers aged up to 35, inclusive.

This means that a 35-year-old customer can, in principle, have access to a maximum term of 40 years, while a customer over 35 years old is subject to a maximum limit of 35 years.

However, the effectively contracted term also depends on solvency analysis and the credit institution's criteria.

How long the term, more interest pays?

Usually, yes.

If the financed amount and interest rate are similar, extending the term means keeping the capital in debt longer. Consequently, the total amount of interest paid tends to increase.

That's why, when comparing offers, you shouldn't just look at the monthly payment.

It is important to analyze:

Monthly payment → interest → fees → total cost of credit

A lower payment may be more comfortable for the monthly budget, but may represent a higher total cost over the contract.

Is the lowest payment always better?

No.

A lower payment can ease monthly budget management and leave more room for other expenses, savings, or emergencies.

On the other hand, a longer term can increase the total cost of financing.

Already a higher payment can allow finishing the loan earlier and reduce the interest payment period, but may represent a greater monthly effort.

The goal is to find a balance between a sustainable payment and a total cost suitable for your financial situation.

How to choose the right term for a housing loan?

Before deciding, compare different scenarios and take into account your age, the maximum term available, and the payment you can afford.

The exact amounts depend on the financed amount, interest rate, fees, and other credit conditions.

Also important to note that the maximum term set by Banco de Portugal does not necessarily mean that is the term the bank will offer. The institution assesses the client's solvability and applies its own lending criteria.

What happens if you choose a too short term?

A shorter term generally allows finishing the loan earlier and reducing the period during which interest is paid.

However, the monthly payment will be higher.

If the payment represents too high an effort, you may have less financial margin for other expenses, savings, or emergencies.

That's why choosing the shortest term possible doesn't always mean choosing the most suitable solution for the budget.

What if you choose a period that's too long?

A longer term can make the monthly payment more comfortable, but extends the financial commitment and tends to increase the total cost of the credit.

In addition, age can limit the available term.

For new contracts, the maximum limit is currently 40 years for customers up to and including 35 years old, and 35 years for customers over 35 years old.

The maximum age set by the bank for the end of the contract may still apply.

That's why the term should be analyzed not only based on the amount you can pay today, but also considering the total duration of the financing.

Can the housing loan term be changed?

In certain situations, it may be possible to renegotiate credit terms with the bank, including the period, but any change depends on the credit institution's analysis and acceptance.

It may also be possible to transfer the credit to another institution if you find more suitable conditions.

If you already have a housing loan, it may be worth comparing current conditions with other offers available in the market.

30, 35 or 40 years: which term is more advantageous?

There is no single answer.

A 30-year term may result in a higher payment, but allows finishing the financing earlier.

A 35-year term can represent a balance between monthly payments and the loan duration.

A 40-year term may allow a lower monthly payment, but is currently limited to customers aged up to 35, inclusive.

In addition, the age of the oldest applicant and the credit institution's criteria may reduce the effectively available term.

Therefore, the best way to compare options is to analyze the impact of each term on the monthly payment and the total cost of the loan.

Simulate your housing loan

Are you thinking of buying a house and want to know the term you can have and the impact on your payment?

Make a free simulation at Poupança no Minuto and compare the available financing options for your case.