Getting A Mortgage In Portugal
Many people purchasing property in Portugal will look to finance their purchases partly with a Portuguese mortgage.
What mortgage suits you best?
A lot of people don’t want to use all of their own Money & need a mortgage for Portuguese Property.
Here at PortugalProperty.com we can provide you with the best contacts. We have a great selection of banks with choices that can be tailored to your needs. As of January 2017 it is possible to borrow up to 70% of the purchase price. Or Up to 70% of the Valuation of the property (LTV), (85% if Portuguese) is offered and is discussed on a case by case basis. Mortgages in Portugal are usually given to people up until the age of 65. The criteria for getting a mortgage in Portugal, is very similar to how it would work in most other European countries. Mortgages are granted and based one’s affordability and security. Many investors will want to fix their mortgages for many year, which in Portugal is seen as common practise, and you able to do so for the entire period of the loan if you wish typically 15/20 or 25 yrs although you can get up to a 50yr mortgage.
As recent as two years ago, mortgages for non-residents were nearly impossible to arrange. Fortunately, times have changed and there is a now a variety of mortgages and sources to choose from.
We deal with the major Portuguese, Spanish and British banks and can ensure your application proceeds smoothly.
There is also the opportunity to maximise your money by borrowing up to 70% of the valuation of the property. This is extremely beneficial if you buy off-plan as it is often a way of effectively returning your initial deposit to you. This and other useful information is detailed bellow. There are no interest only mortgages in Portugal to non-residents at the current time.
This is what most clients have at home. Typically structured over 15/20 or 25 years the monthly repayments cover the interest and a portion of the outstanding capital so that at the end of the term the debt is duly repaid.
Mortgages in Portugal can often be approved based on the valuation of the property and not the purchase price. By purchasing an off-plan property (and typically paying a 30% to 35% deposit) you can often borrow enough from the bank at completion to pay the developer and replenish your funds (from wherever the deposit originated). This is dependent on the property increasing in value from the purchase date until completion.
- Purchase or construction of property;
- Up to 65% or 70% Loan-to-Value (subject to case-to-case analysis) for secondary residency / holidays properties;
- Up to 50 years, not exceeding 75 years of age of oldest applicant;
- Promotional spread minimum of 1,15% during the entire term – Special Conditions Apply;
- Standard margins between 1,79% and 3,60% (depending on LTV and loan amount);
- Variable Rate Solution: mortgage loan interest rate linked to Euribor 12M;
- Fixed Rate Solution: mortgage loan interest rate fixed during 5 years (linked to Swap Rate 5years), followed by Euribor 12M;
- Residual Value: with this solution it is possible to postpone 30% of loan capital to be paid only on the end of term
Mortgage Options are improving all the time and we will be glad to give you a personal quotation at any time. We can also provide an agreement in principle to give you added piece of mind.
You should also consider using equity that is in your property for the initial deposit. This keeps any cash reserves and makes excellent use of the gains seen on most UK & Irish properties in recent years.
The process is very simple and we will personally introduce you to a bilingual representative of the bank or financial institution.
Go to our Mortgage Documents checklist page for further information.
Transferring you Deposit:
When transferring your money for purchase of a property to Portugal, it is advisable when dealing in foreign currency to use a foreign currency broker, see our Foreign currency page for further details.
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