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Getting a mortgage in Portugal

Getting a mortgage in Portugal You need to know exactly how much you can afford to spend and how you will finance your property. Many agents recommend you have your finance in place before you go and view properties, so you won’t lose out because the process is not always as quick one.

Getting a Portuguese mortgage

Arranging any mortgage abroad can be a daunting prospect and Portugal is certainly no exception. For the uninitiated, it’s difficult to know where to start and whether information you see or receive is correct. This is complicated by the fact that banks lending in Portugal do not always offer the same conditions to clients, even if they have similar profiles. The mortgage market in Portugal is quite traditional in the sense that having the right contacts is crucial if you want to get the best deals. The process typically takes 6-8 weeks.

Basic Mortgage Facts

  • Max 80% loan to value
  • Max term 40 years
  • €60,000 minimum loan
  • Rates from 0.873%

Should I raise finance from my UK property or take out a Portuguese mortgage?

If you have sufficient equity in your UK property, you can choose to take out an additional or new mortgage to buy your overseas property. Bear in mind, even though there is no Portuguese lender in place to insist on certain processes, you should still seek legal advice and ensure independent checks are carried out on the property.

One advantage of a Portuguese mortgage is that the lender will carry out its own checks on the property and arrange a valuation. Portuguese mortgage rates are particularly attractive (see example terms above) and present buyers with a good option to raise finance locally.

Rates now start at 0.873% for a variable rate of up to 80% loan-to-value (based on the purchase price) and 1.2% for a fixed rate of up to 80% loan-to-value.

Interest-only deals are rare so most mortgages are on a repayment basis with the maximum term 40 years. If you are 80 years or older, it is advisable to speak to a mortgage specialist as they are ways for you to obtain a mortgage. It is worth remembering that monthly mortgage payments will be in Euros and the Sterling rate will vary so it is a good idea to have a currency strategy in place to mitigate any fluctuation if you are paying your monthly mortgage payments from the UK.

Portuguese banks, mortgage brokers & British buyers

Mortgage rates from Portuguese banks are very low and lending conditions continue to improve. There is strong interest from Portuguese lenders to assist foreigners in buying property. You can approach the different banks directly in Portugal but keep in mind that each one has different criteria and you may not necessarily find the best deals available. The language barrier may also prove difficult. Another option is to use a registered mortgage broker who understands the market and has relationships in place with the different lenders and can find the best product to suit your requirement.

For more information on qualifying criteria, interest rates and affordability, download a copy of our Portugal Buying Guide

FAQs: Getting a mortgage in Portugal

Can foreigners get a mortgage in Portugal?

Yes. Foreigners, including UK residents after Brexit, can apply for mortgages in Portugal. Most banks are willing to lend to non-residents, though lending criteria are usually stricter than for Portuguese citizens.

How much can I borrow with a Portuguese mortgage?

Non-residents can usually borrow between 60% and 70% of a property’s value. Residents may be able to borrow up to 80%–90%. The exact amount depends on income, credit history, and the bank’s assessment.

What documents do I need for a mortgage in Portugal?

Typical requirements include proof of income (such as payslips or tax returns), bank statements, ID or passport, Portuguese tax number (NIF), and details of the property being purchased. Non-residents must also show proof of address in their home country.

What are mortgage rates like in Portugal?

Rates vary depending on the bank, loan term, and whether the mortgage is fixed or variable. Portuguese mortgage rates are often lower than in the UK, but it is important to compare offers carefully and consider long-term affordability.

Do I need a mortgage broker in Portugal?

While not required, many foreign buyers use mortgage brokers to find the best deals and navigate language barriers. Brokers familiar with expat buyers can simplify the process and improve your chances of approval.

How long does it take to get a mortgage approved in Portugal?

On average, mortgage approval takes 4–6 weeks. It can be quicker if all documents are in order, but delays may occur if additional checks are needed.

Are there fees when arranging a mortgage in Portugal?

Yes. Fees may include bank arrangement fees, valuation fees, and legal costs. Buyers should also budget for property transfer tax (IMT), stamp duty, and notary fees as part of the overall purchase.

Should I consider exchange rates when repaying a Portuguese mortgage?

Yes. If your income is in pounds, dollars, or another currency, exchange rate fluctuations can affect your repayments. Many overseas buyers use specialist currency services to manage transfers. Get in touch with A Place in the Sun Currency today to see how we can help.

Getting a mortgage in Portugal Download our guide