Getting a Mortgage in Portugal in 2024

Is building your own home in a European country a dream for you? Then let me tell you no more because Portugal has opened its gate for newcomers dreaming of owning a home and living a life in Portugal. Hundreds of thousands of foreigners call Portugal home because of the country’s mild weather and reasonably low cost of living throughout the year. 

With more than 70 per cent of the population owning a home, Portugal likewise has one of the highest homeownership rates. You will likely require a mortgage to purchase a property in Portugal or make remote real estate investments. Fortunately, mortgage loans are available in Portugal to both citizens and foreigners. 

Talking about that, let’s see how you can own a mortgage in Portugal alongside the benefits of owning a mortgage in Portugal. In addition, we will discuss the types of mortgages that Portugal offers and how we can help you in this situation. So, better, let’s continue with our blog post. Moreover, you can search for home insurance in Portugal in 2024.

Mortgage in Portugal

In Portugal, you can purchase a home from anybody and even qualify for a mortgage. Foreign nationals can obtain a mortgage in Portugal. However, the amount they can borrow depends on where they live. Given the relatively straightforward requirements for getting one, mortgages are a standard means of financing real estate investments in Portugal. 

How much and under what conditions you can receive a mortgage in Portugal depends on several aspects. These include your financial situation, work status, and place of residence. Almost anyone in Portugal with a decent credit score can obtain a mortgage. Like other nations, your chances of approval will increase if you have stable employment and income.

Types of Mortgages in Portugal 

There are two basic types of mortgages in Portugal, and here is what you need to know about these two types: 

1. Fixed-Rate Mortgages

These mortgages have a fixed rate for a predetermined period. Although fixed-rate mortgages may cost more than variable-rate ones, you won’t be vulnerable to changes in the Euribor rate. This kind of mortgage guards against shifts in the base rate in Europe. The rate is usually negotiated with the financial institution when applying for financing. 

2. Variable Rate Mortgage

If your mortgage has a variable rate, the interest rate of your monthly payments will fluctuate according to the indexer. You will pay different interest rates throughout the loan if you select a variable-rate agreement. Monthly mortgage payments with variable rates are frequently adjusted every six months following Euribor rates. 

3. Commercial Mortgages

In Portugal, a deposit equal to at least 50% of the sale price is often required to obtain a mortgage on a commercial property. If you’re starting a new business, the mortgage lender will need a business plan and other details about your desired venture.

4. Business Mortgages

It is still possible for you to get financing if you are interested in buying a commercial property, such as a store or restaurant. The maximum mortgage amount is usually equal to half of the buying price. 

5. Buy-To-Rent Mortgages

You may get a buy-to-rent mortgage if you want to purchase a home to rent it out. Portuguese financiers may require a down payment of as much as 40% of the property’s value when offering rent-to-buy agreements. Additionally, you must prove that you can still afford the mortgage even if you receive no rental revenue from the home.

6. Conditions for Buying a Mortgage  

Tenure: If you are not from Portugal, a non-resident, then the tenure ranges from 25 years to 40 years. 

Insurance: A mortgage loan holder must have life insurance. Talking specifically about it, you must have home insurance. 

Loan amount: It varies depending on the property value and your income in general. 

How Do You Apply for Your Mortgage in Portugal?
Step-By-Step Guide 

Step 1: Do the Initial Evaluation

The first step is asking a bank or mortgage broker for an initial evaluation. Remembering your budget, you can accomplish this even before you locate your ideal home. Also, ask for preliminary evaluations from several brokers to choose the finest terms later. This initial evaluation is free and comes with no strings attached.

Step 2: Do the Documentation

If the initial analysis is positive and you choose to move further, you will generally receive a detailed mortgage quote within 24 to 48 hours.

Step 3: Formal Mortgage Letter

The lender will assess your application and the necessary paperwork after you submit it. In addition, they will make a formal mortgage offer if it is accepted. 

Step 4: Get the Valuation Report

Upon getting a formal mortgage offer and submitting your documentation, the bank must visit the property to do the appraisal. 

Step 5: Make the Final Arrangements

The money needed to buy a house should be moved into the appropriate account. Once the funds are ready, the mortgage company will formally schedule the completion date. 

Step 6: Completion Phase

The mortgage company will make the instalment arrangements for you after all the money is in the appropriate account. The mortgage and property deeds will be signed before a Portuguese notary. You are responsible for paying the taxes and fees. After that, you’ll be the proud owner of your new home!

Documents Required to Get a Mortgage in Portugal

To apply for a Portuguese mortgage, the following paperwork is typically required: 

Additional Costs of Mortgages in Portugal

Your total additional fees will differ depending on your bank and loan. A lease charge, a processing cost, and an official registration fee are the very least that you should budget for. Before you can get a mortgage, most banks need you to show proof of life insurance. 

You might also need building or health insurance in some situations. 

Regarding term extensions, Portuguese financiers can be comparatively cautious about taking risks. Because home modifications will raise the property’s worth or energy efficiency, banks can be more willing to let you lend more money to them. Finally, remember that non-residents often must put down at least twenty per cent of the property cost to qualify for a Portuguese mortgage.

How Can We Help You? NIF and NISS Portugal

As a well-known Portuguese services company, we are experts at helping our clients, no matter where they are headquartered globally, have a presence in Portugal. We have created an easy-to-use web portal that allows anyone to create a bank account in Portugal and get an NIF. This will make the process of getting a mortgage commence much more efficiently. 

In Portugal, an NIF is also necessary for making real estate purchases or entering into contracts. NIF Portugal makes it simple for users to obtain the required services with easy-to-use navigation and clear directions. We aim to minimize wait times, process applications more quickly, and provide our clients timely results.

Thanks to our effective workflow and committed crew, applications are handled with the highest urgency and professionalism. We work to make establishing oneself as easy as possible with our everlasting dedication to excellence and client happiness.

Frequently Asked Questions