Getting a mortgage in Portugal
Buying Property in Portugal? How Much Could You Borrow?
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Ready to invest in your dream home in Portugal? As an international buyer, you can purchase property in Portugal using a mortgage. No matter where you are from, the process is broadly similar to that for locals; however, there are a few differences depending on your residency status. As a rule, banks here are happy to lend to foreign buyers, but you’ll need to meet specific eligibility requirements.
How much can you borrow?
This depends on the value of the property. The loan-to-value (LTV) ratio is the percentage of the property’s value that the bank is willing to lend you. For residents, generally you can borrow up to 90% LTV, meaning you'll need a deposit of at least 10% of the property price. For non-residents, the LTV can be slightly lower, typically ranging from 65% to 75%, requiring a larger down payment.
The maximum term for repayment is 40 years and usually will need to be repaid by the time you are 75.
When applying for a Portuguese mortgage, you will typically be asked to provide:
- Date of birth of all applicants
- Completed bank application form
- Copy of your passport
- Portuguese Fiscal Number (NIF)
- Bank statements covering the previous three months, including details of salary, investments and existing loans
- Proof of residence, such as a utility bill
- Copy of your most recent income tax declaration
- Employer's reference confirming your current employment, length of service and gross annual salary
- Payslips for the previous three months
- Full credit report, including credit score
- Property documentation, including plans, the caderneta predial, title certificate and the name and contact details required for the property valuation
What happens next?
Decision in principle: Based on the information and documentation provided, the bank can assess your circumstances and give an initial indication of how much you may be able to borrow.
Property valuation: Once you have identified a property, the bank will arrange a valuation to confirm its market value and ensure it provides sufficient security for the proposed mortgage. This can take a few weeks.
Mortgage offer: Once your application has been approved and the valuation completed, the bank will issue its formal mortgage offer.
Completion: Once all the necessary legal and banking requirements have been completed, you will sign the mortgage and purchase documentation, and the bank will release the funds.
And now the fun can begin!
As multi-award-winning real estate agents in Portugal, we're perfectly placed to help you find your ideal property, whether you're looking for a holiday home, investment property or a permanent residence.
And if you need advice on financing your purchase, our certified in-house mortgage team is here to help. Get in touch today to discuss your requirements and find out how much you could potentially borrow.