Best Mortgage Lenders in Portugal: 2024 Guide

When searching for the best mortgage lenders in Portugal, you need clear, concise information. Our guide cuts through the jargon, directly comparing top lenders on rates, terms, and suitability for a broad spectrum of property buyers.
April 4, 2024
Dean Fankhauser
April 4, 2024

When searching for the best mortgage lenders in Portugal, you need clear, concise information. Our guide cuts through the jargon, directly comparing top lenders on rates, terms, and suitability for a broad spectrum of property buyers. With impartial insights and zero fluff, you’re on your way to partnering with a lender that complements your property investment goals in Portugal.

Key Takeaways

  • Eligibility for a mortgage in Portugal typically depends on consistent income, a healthy credit score, and being within the banks’ age limit, with the advised monthly expense limit being 30 to 35 percent of one’s net monthly income.
  • The top recommended mortgage lenders for non-residents in Portugal include Novobanco, Caixa Geral de Depósitos (CGD), and Millennium BCP, with loan-to-value ratios typically between 60 and 70 percent. Independent mortgage brokers can be instrumental in securing the best rates by negotiating with lenders.
  • The EU base rates have an impact on mortgages in Portugal; fixed-rate mortgages offer consistency in payments and protect borrowers from interest rate fluctuations, whereas variable-rate mortgages follow the Euribor rate plus a bank-specified mortgage spread.

Navigating the Portuguese Mortgage Landscape

Portuguese Mortgage Landscape

Though the Portuguese mortgage landscape might appear intimidating initially, it is less complicated than it appears. In Portugal, there are a few key factors that determine your eligibility for a mortgage. Are you earning a consistent income or receiving a regular pension? Is your credit score looking healthy? Are you over the bank's set age limit? If you can check these boxes, you’re off to a good start! The golden rule is to keep your total monthly expenses within 30 to 35 percent of your net monthly income.

The Portuguese real estate market has shown a strong recovery in recent years, with property prices steadily on the rise. When it comes to choosing a mortgage, you have two main routes to explore. You have the option to approach a bank directly for a mortgage. Alternatively, you can also seek the assistance of an independent mortgage broker. Regardless of your choice, scrutinizing the interest rates and assessing any extra costs associated with the loan is paramount. With the right guidance, you’ll find your way through the Portuguese mortgage market with ease.

Top Mortgage Lenders for Property Investment

Top Mortgage Lenders for Property Investment

Choosing the right mortgage lender is an essential step when securing a mortgage for property investment in Portugal. A good lender will offer competitive rates and favorable terms, making your mortgage journey much smoother. Among the recommended financial institutions for non-residents looking to invest in property in Portugal are Novobanco, Caixa Geral de Depósitos (CGD), and Millennium BCP.

These institutions offer mortgage loans with a loan-to-value ratio (LTV) that typically falls within the range of 60 to 70 percent for non-resident mortgage seekers. The LTV ratio represents the proportion of the mortgage loan in relation to the appraised value of the property.

But how do you secure the most favorable mortgage rates? That’s where mortgage agents come in. They play an instrumental role in securing the best rates by engaging with multiple mortgage lenders on your behalf.

Let’s explore three of the top mortgage lenders in Portugal in more detail.

Millennium BCP

The popular choice for non-residents seeking a mortgage in Portugal is Millennium BCP. Many people opt for their services. They offer a range of mortgage options tailored for non-residents, including a variable rate of 1.5% plus the 12-month Euribor. Yet, one shouldn’t overlook tax office charges and other costs linked to securing a mortgage in Portugal.

Whether you’re looking for a flat, a house, or a property in need of renovation, Millennium BCP has got you covered. They offer mortgage options for a range of property types, making them a flexible choice for various investment needs.

Banco Santander Totta

Banco Santander Totta is another top contender for non-residents seeking a mortgage in Portugal. They offer a variety of mortgage alternatives, with the possibility of obtaining up to 80% financing for non-residents purchasing property in Portugal.

2.5% is the initial mortgage rate that Banco Santander Totta offers. They use their mortgage simulator to assess the fee and expenses, which serve as the basis for their calculation of mortgage interest rates in Portugal. This thoughtful approach to mortgage calculation ensures you’re always aware of what you’re signing up for.

Novo Banco

Novo Banco is renowned for its comprehensive service offering for non-resident foreigners interested in buying property in Portugal. The mortgage application process involves gathering all required documentation, such as ID, proof of income, tax returns, and the property purchase contract.

In addition to providing mortgages, Novo Banco offers insurance and investment funds to non-resident foreigners investing in property in Portugal. This means you can manage your mortgage, insurance, and investment needs all under one roof, making Novo Banco a one-stop solution for your property investment needs.

Understanding Variable Rate Mortgages

Variable Rate Mortageges

While the idea of variable-rate mortgages might appear complicated, understanding the basics makes it far less daunting. A variable-rate mortgage in Portugal is characterized by fluctuating monthly payments determined by the base rates of the European Union.

The Euribor rate, which serves as a key interest rate in the EU, significantly impacts variable-rate mortgages in Portugal. Borrowers who opt for a variable-rate mortgage usually pay the Euribor rate along with a predetermined percentage, referred to as the mortgage spread, typically averaging around 0.85 percent for the majority of financial institutions. These rates are revised every six months, keeping them in sync with market conditions.

Fixed-rate Rate advantages

While variable-rate mortgages have their benefits, there’s something comforting about the predictability of a fixed-rate mortgage. It allows property owners to make consistent payments at a set interest rate for a specific duration, providing stability in their mortgage payments.

The main benefit of opting for fixed-rate mortgages in Portugal is the protection they provide against fluctuations in the Euribor rates, thus maintaining a consistent interest rate over the duration of the loan. As of May 2023, fixed-rate mortgages are offered at an interest rate of 3.9 percent (TAEG) for a maximum of five years, ensuring stability for homeowners during this timeframe.

The Role of Independent Mortgage Brokers

Independent mortgage brokers can serve as valuable guides in the Portuguese mortgage market. They provide support and guidance throughout the mortgage application process, assisting property investors in navigating the market and securing the most favorable deals.

Utilizing an independent mortgage broker in Portugal offers the following advantages:

  • Professional guidance at no extra expense, as they usually operate on a commission basis
  • Valuable market knowledge and negotiation skills
  • Established relationships with lenders, often gaining access to exclusive deals and discounts for the borrower
  • Assurance that you’re getting the best deal possible

With a trustworthy broker by your side, you can rest assured that you’re getting the best deal possible.

Preparing Your Financial Profile

Preparing your financial profile is a vital step before applying for a mortgage. A robust employment history holds significant importance when applying for a mortgage in Portugal. A proven track record of at least one year of professional experience with a specific company, or two years if self-employed, can certainly enhance your financial profile.

Income verification generally entails submitting evidence of income, such as payslips or bank statements, in addition to a passport copy and Portuguese tax identification number (NIF). Banks may also require additional documents based on individual circumstances, such as further proof of identity, tax documentation, and evidence of assets or existing debts. Let’s delve deeper into the specifics of employment history and property valuation.

Employment History and Income Verification

When applying for a mortgage in Portugal, it’s crucial to authenticate your employment history. This involves furnishing evidence of current employment, such as:

  • an employer’s reference letter
  • if self-employed, your most recent tax return
  • six months of bank statements
  • a copy of the company’s accounts.

Income forms considered for mortgage applications in Portugal encompass salary income, dividend payments, investment income, pension income, and rental income. Verification necessitates providing evidence like payslips, self-employed accounts, tax documents, personal bank statements for the previous three months, or bank statements displaying the recent 60 days of cash flow.

Property Valuation Essentials

Property valuation is a crucial component that the bank manages to assess the property. It holds substantial importance in the mortgage application process, as the valuation should ideally match or surpass the purchase price to guarantee the suitability of the loan amount in relation to the property’s value.

When selecting a property valuator in Portugal for a mortgage application, it is essential to consider their registration and regulation by the Portuguese authorities. The property valuation for mortgage purposes in Portugal encompasses various crucial factors, such as:

  • The property’s overall condition
  • Location
  • Size
  • Current market demand
  • The borrower’s financial circumstances

The property valuation has a direct impact on borrowing limits for potential homeowners in Portugal. Non-residents can typically borrow between 65-75% of the property’s value or sale price, whichever is lower. On the other hand, fiscal residents have the option to borrow up to 90% of the sale price or valuation, opting for the higher amount.

Mortgage-Related Fees and Taxes

Acquiring a mortgage involves more than just repaying the loan; there are several fees and taxes to consider as well. When acquiring a mortgage in Portugal, you can expect to encounter mortgage-related fees, including the property tax, Imposto Municipal sobre Transmissôes Onerosas de Imóveis (IMT), which is levied when obtaining a mortgage in Portugal. The rates are determined by whether the property is used as a main residence or not and can range up to 8% in progressive rates. In addition, there is an 8% stamp duty called Imposto de Selo that is also imposed. It’s essential to be aware of the tax office fees when planning your budget for a mortgage in Portugal.

Unfortunately, the IMT tax cannot be added to the total mortgage sum and must be paid separately. It’s crucial to factor in these additional expenses when calculating the total cost of your mortgage.

Maximizing Your Buying Power

Boosting your buying power involves more than merely increasing your income. To improve borrowing capacity for a Portuguese mortgage, consider:

  • Diversifying lending across various loans
  • Negotiating for interest rate reductions
  • Reducing or refinancing current consumer debt
  • Minimizing monthly living expenses

Keeping a healthy credit score can greatly enhance your mortgage buying power in Portugal, as it:

  • Increases the chances of mortgage approval
  • May result in more favorable interest rates and insurance conditions
  • A higher down payment can positively impact your mortgage terms by reducing the loan-to-value ratio, which in turn mitigates risk for the lender.

Securing a Mortgage as a Non-Resident

Obtaining a mortgage in Portugal as a non-resident involves adhering to a unique set of rules. Typically, non-residents can secure mortgages with loan-to-value ratios that fall within the range of 60% to 70% of the property’s valuation. This option provides a viable avenue for non-residents to access financing. Non-residents applying for a mortgage in Portugal will also need to make a minimum deposit of 30 percent of the purchase price.

While the process might seem challenging, it’s certainly achievable with the right guidance. In Portugal, certain banks, such as Santander, set the minimum deposit requirement according to your citizenship. This means that the amount may vary depending on your nationality. But with a bit of research and preparation, securing a mortgage as a non-resident is well within reach.

Real Estate Market Trends and Mortgage Impact

Monitoring market trends can provide valuable foresight into Portugal’s mortgage future. Despite declining demand and decelerating economic growth, there is a continual upward trajectory in house prices in Portugal. The real estate market is expected to sustain its upward momentum in 2024, with an approximate 8.7% increase in home prices.

These market dynamics, along with historically low mortgage interest rates in the euro area, are influencing mortgage rates and borrowing conditions. Changes in the real estate market, such as a market slowdown and adjustments in monetary policy, can have substantial implications for mortgage lending policies.

Estimated Monthly Mortgage Repayment Calculations

Portuguese banks and mortgage providers offer online mortgage calculators as a useful tool for estimating monthly mortgage repayments during the mortgage process. These calculators take into account various factors, including:

  • Income
  • Expenses
  • Loan details
  • Principal and interest
  • Home costs such as taxes and insurance
  • Home price
  • Down payment

Potential homeowners can access mortgage calculators on the following websites to approximate monthly expenses, loan amounts, and interest rates for a mortgage in Portugal:

  • Quinta Finance
  • Ideal Homes Mortgages
  • Simon Conn
  • Mortgages4Portugal
  • Portugal Private Finance
  • Portugalist

These calculators are a trustworthy tool for approximating monthly mortgage payments, encompassing interest, tax, and insurance expenses.


We’ve walked you through the ins and outs of the Portuguese mortgage landscape, providing you with insights into the top mortgage lenders, the benefits of different mortgage types, and various strategies to enhance your buying power. We’ve explored the role of independent mortgage brokers, how to prepare a strong financial profile, and the impact of real estate market trends on mortgages.

With this comprehensive guide, you’re now equipped with the knowledge to confidently navigate the Portuguese mortgage market. Whether you’re a non-resident looking to invest in a stunning Algarve villa or a local resident dreaming of a chic Lisbon apartment, your dream property is well within reach. Embark on your property investment journey today and make your Portuguese dream a reality.

Frequently Asked Questions

What is the best way to get a mortgage in Portugal?

To get a mortgage in Portugal, ensure you have a good credit score and stable income, then request an initial assessment from a bank or mortgage broker and submit the required documents to proceed. After valuation and final arrangements, the process will conclude at the notary.

What is the average mortgage interest rate in Portugal?

The average mortgage interest rate in Portugal has almost doubled in the last year, reaching 4.26% in September 2022, the highest value since February 2012.

Can Americans get a mortgage in Portugal?

Yes, as non-residents, Americans can obtain a mortgage in Portugal, although the process may require more paperwork and documentation than for residents.

How much deposit do I need for a mortgage in Portugal?

Non-residents usually need a minimum deposit of at least 30 percent of the purchase price for a Portuguese mortgage, as financial institutions generally provide between 60 percent and 70 percent of the valuation price in credit. Aim for a deposit of 30 percent of the purchase price to secure a mortgage in Portugal.

What is the typical loan-to-value ratio for non-residents seeking a mortgage in Portugal?

Non-residents seeking a mortgage in Portugal can typically expect a loan-to-value ratio between 60% and 70% of the valuation price. This provides a general range to consider when exploring mortgage options in Portugal.

About Movingto

Movingto is a leading immigration law firm that specializes in helping individuals and families navigate the complex process of relocating to Portugal. With a team of experienced lawyers and immigration experts, provides tailored solutions to meet the unique needs of each client.

Why Choose Movingto?

  • Expertise and Experience: Our lawyers have extensive knowledge of Portuguese immigration law and years of experience assisting clients with various visa applications, including the D7 Visa, Golden Visa, Startup Visa, and Family Reunion Visa.
  • Personalized Approach: We understand that every client's situation is different. Our lawyers take the time to listen to your goals and provide personalized advice and guidance throughout the process.
  • Comprehensive Support: offers a comprehensive range of services beyond legal advice, including assistance with document preparation, property search, and relocation planning.
  • Competitive Fees: We offer competitive fees and transparent pricing so that you know exactly what to expect.
  • Exceptional Client Service: Our team is committed to providing exceptional client service. We are responsive, attentive, and always available to answer your questions.

Whether you are an entrepreneur seeking to establish a business in Portugal, a retiree looking to enjoy the country's favorable tax regime, or a family seeking to reunite in Portugal, is here to guide you every step of the way.

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