What is the taxa de esforço (debt-to-income ratio)?

What is the taxa de esforço?

The taxa de esforço (debt-to-income ratio) is the share of a household's net monthly income that is committed to servicing credit: the mortgage, the car loan, a personal loan or the cards¹. In other words, it measures how much of what lands in your account each month is already set aside to repay debt.

It is the first calculation a bank runs before approving a loan: it gauges whether the household can afford the new payment without being squeezed. The lower the taxa de esforço, the more breathing room the budget has, and the more likely the credit is approved.

How is the taxa de esforço calculated?

The formula is simple¹:

taxa de esforço = monthly credit payments ÷ net monthly income × 100

• For income, count the net amount (after income tax and social security) of everyone in the household.
• For payments, add up every credit instalment (mortgage, car, personal loan and the minimum card payment).

For example, a household with €2,000 of net income paying €600 of instalments has an effort rate of 30% (600 ÷ 2,000). You can run this calculation in our debt-to-income calculator and see how much is left for a new payment.

What is the recommended effort rate?

As a prudent benchmark, the taxa de esforço should not exceed about 35% of net income (close to a third). That is the margin that usually keeps a budget breathing: there is money left for everyday expenses, for saving and for absorbing shocks.

Above 35%, the effort is high and any shock bites much harder: a rise in Euribor that lifts the payment, a health expense or a drop in income. So even when the bank accepts a higher figure, it is worth treating 35% as your own comfort limit.

What is the limit banks must respect?

Beyond prudence, there is a rule. Under the Banco de Portugal macroprudential recommendation, banks should only grant new credit with an effort rate (the DSTI ratio, debt service-to-income) up to 50%². There are limited exceptions: up to 10% of each bank's new credit may reach 60%, and a small share may exceed the limits.

That is why an effort rate above 50% makes loan approval very hard.

Note (figure subject to change): the limit in force is 50%, but the Banco de Portugal has consulted the sector on lowering it to 45%, expected to apply from August 2026. Always confirm the figure in force with your bank when you apply.

Which income and payments count?

• Counted as income: net salaries and wages of the whole household, and regular income (for example, rent received or stable social benefits).
• Counted as payments: every credit instalment (mortgage, car, personal loan, consumer credit and the card payment).
• Not counted: everyday bills like water, electricity, gas, telecoms, groceries, school or fuel. They matter for your budget, but they are not part of the taxa de esforço.

How can I lower the taxa de esforço?

If your effort rate is high, there are several ways to bring it down:

1. Cut payments: consolidate several loans into one, or renegotiate terms and rates to lower the total instalment.
2. Raise income: include the net income of a second borrower in the household.
3. Put down a larger deposit: borrowing less capital lowers the payment (and the effort rate).
4. Lengthen the term: a smaller instalment lowers the effort rate, but raises the total interest paid over the life of the loan, a trade-off to weigh.

Our debt-to-income calculator shows the largest payment that still keeps you within 35%, useful for understanding how much you can borrow before moving on to the mortgage payment calculator.