How to Get a Mortgage in Portugal: The Complete Guide in 2024

Are you figuring out how to get a mortgage in Portugal? This straightforward guide cuts to the chase, providing you with essential steps and practical advice.
January 11, 2024
Ana Fankhauser
January 11, 2024

Are you figuring out how to get a mortgage in Portugal? This straightforward guide cuts to the chase, providing you with essential steps and practical advice. From understanding loan-to-value ratios and eligibility criteria to the role of mortgage brokers, we cover the must-knows without overloading you with complex jargon. Perfect for residents and non-residents alike, let’s simplify your route to securing a Portuguese mortgage.

Key Takeaways

  • The Portuguese mortgage process for residents and non-residents includes an initial bank assessment, a detailed review of applications, an understanding of loan-to-value ratios, and the importance of down payments.
  • Mortgage brokers can help applicants navigate the available options and negotiate terms because mortgage eligibility in Portugal depends on factors like employment status, stable income, credit history, and the value of the property.
  • Additional costs associated with a Portuguese mortgage include bank fees, notary fees, and taxes like IMT and IMI, which need to be factored into financial planning, along with special considerations for retirees and self-employed individuals.

Navigating the Portuguese Mortgage Landscape

Portuguese mortgage market

As you embark on your journey to secure a Portuguese mortgage, it becomes vital to understand the local mortgage market. Portugal’s mortgage landscape offers a variety of mortgage types tailored to different requirements, such as fixed-rate and variable-rate mortgages.

Applying for a mortgage involves several steps:

  1. Initial assessment by a bank or mortgage broker
  2. A comprehensive review of your application and the property
  3. Understanding loan-to-value ratios and the importance of down payments

These steps are important in the mortgage application process.

Understanding the Mortgage Application Process

The process of applying for a mortgage in Portugal is a carefully orchestrated dance between you, the mortgage broker, and the lender. It all starts with an initial assessment, where you approach a bank or a mortgage agent with your application. This is followed by a thorough examination of your application, including an analysis of your employment and income status, credit history, and the value of the property you intend to purchase.

Upon approval, the lender issues a formal mortgage offer, and the property is assessed for its value. The process concludes with the signing of the property and mortgage deeds, officially marking the transfer of property ownership to you.

Evaluating Mortgage Types

When it comes to mortgages in Portugal, you have multiple options to choose from. Fixed rate mortgage offers the advantage of a constant interest rate for a specified duration, allowing for straightforward financial planning. On the other hand, variable-rate mortgages may start with lower interest rates, but these can fluctuate based on market conditions.

Every mortgage type, including mortgage loan, presents its own advantages and disadvantages, with the optimal choice hinging on your unique circumstances and financial aspirations.

Loan-to-Value Ratios and Down Payments

Loan-to-Value (LTV) ratios and down payments are two fundamental factors in determining your mortgage eligibility and affordability in Portugal. Here are the key points to remember:

  • The LTV ratio represents the proportion of the loan to the value of the property.
  • Residents may be eligible for a loan up to 80% of the property’s value.
  • Non-residents can obtain a mortgage for up to 70% of the property’s value.

Typically, a larger down payment results in a lower LTV ratio, potentially leading to more beneficial loan terms and smaller monthly payments.

Qualifying for a Mortgage: What You Need to Know

Mortgage eligibility factors

Eligibility for a mortgage in Portugal is determined by several key factors, including:

  • Your employment status
  • Your income
  • Your credit history
  • The value of the property you intend to purchase

Lenders evaluate your job stability, income consistency, and credit score to decide whether you pose a financial risk.

A commendable credit score and a steady income from a stable job can notably boost your mortgage eligibility. Let’s delve into these factors to uncover what you need to qualify for a mortgage.

Employment and Income Verification

When applying for a mortgage, your employment status and income play a crucial role. Lenders prioritize a reliable income from stable employment, passive investment income, or business ownership. To verify your employment and income, you will need to provide supporting documents such as payslips, tax records, income bank statements, and business bank statements if you are self-employed. This documentation helps lenders assess your ability to meet your mortgage repayments over the term of the loan.

The Role of Credit History

Your credit history is another key component that affects your mortgage eligibility. Lenders analyze your credit history to determine your loan eligibility, with a favorable credit score enhancing the likelihood of approval.

A steady income, secure job, and a commendable credit score can substantially elevate your chances of securing a mortgage. Conversely, a poor credit history can hamper your prospects, making it vital to manage your debts responsibly and maintain a positive credit history.

Assessing Property Value

The value of the property you plan to buy also holds a significant role in your mortgage application process. Lenders will carry out a property valuation to determine its market value, which directly influences the amount of financing you can obtain. Properties in sought-after areas can command higher values, potentially allowing for greater borrowing amounts.

However, it’s essential to remember that the final loan amount will also depend on other factors, such as your income, credit history, and LTV ratio.

Partnering with a Mortgage Broker

Benefits of using a mortgage broker

Collaborating with a mortgage broker can simplify the mortgage application process and assist you in securing the best deal. A mortgage broker serves as an intermediary between you and potential lenders, helping you navigate the diverse range of mortgage options available in the Portuguese market. They can assist you in selecting the most suitable mortgage product for your needs and negotiate favorable terms on your behalf.

We’ll explore further the benefits of partnering with a broker and how to choose the right one.

The Advantages of Using a Broker

Engaging a mortgage broker offers numerous advantages. They can streamline the process of making offers at banks, assist you in selecting the most appropriate option, and secure the most favorable mortgage rates and terms. Additionally, brokers often receive their compensation through commissions paid by the bank, meaning that their services may not result in any extra charges for you.

This makes working with a Portuguese mortgage lender broker a financially advantageous option when navigating the Portuguese mortgage landscape, especially considering that Portuguese banks offer mortgages with competitive rates.

How to Choose the Right Broker

When selecting a mortgage broker, consider factors such as their reputation, experience, and fee structure. Look for brokers with positive reviews and a proven track record of success. Also, consider whether the broker can effectively guide you through the intricate mortgage application process and offer access to a diverse range of bank offers.

Keep in mind, the right broker can streamline your journey to homeownership in Portugal.

Financial Considerations and Costs

Financial aspects of obtaining a mortgage

Securing a mortgage comes with its share of financial considerations and costs. Apart from the principal loan amount and interest, you’ll also need to account for various fees and charges, including bank fees, notary fees, and taxes. The costs associated with these can significantly impact your overall financial planning.

Let’s explore these financial aspects further to aid you in better understanding the costs involved.

Estimating Your Monthly Repayment

One of the first things you’ll need to consider is your estimated monthly mortgage payments. This is the amount you’ll be required to pay to your lender each month, including the principal and interest. The amount of your monthly repayment will be determined by factors such as the loan amount, the mortgage term, and the interest rate.

You must ensure that this amount is affordable and comfortably fits within your monthly budget.

Understanding Additional Fees

Securing a mortgage comes with various additional fees that you need to account for. These include bank fees, notary fees, and taxes such as the Municipal Property Transfer Tax (IMT) and Property Purchase Tax (IMT).

Understanding these fees and incorporating them into your budget during your property purchase planning is of utmost importance.

Tax Implications on Property Purchase

Purchasing a property in Portugal comes with its share of tax implications. Property owners have the obligation to pay various taxes, including the Municipal Property Tax (IMI), Property Purchase Tax (IMT), and Stamp Duty. These taxes contribute to the upkeep and development of public services and infrastructure. Understanding these taxes and factoring them into your budget can help you avoid any financial surprises down the line.

Securing a Mortgage as a Foreign Investor

Securing a mortgage as a foreign investor

Purchasing property in Portugal isn’t just for residents. If you’re a non-resident or foreign investor, you too can secure a mortgage in Portugal. However, the process may involve some additional steps and requirements, such as providing proof of regular income and obtaining a Portuguese Tax Number (NIF).

Let’s examine more closely what securing a mortgage as a foreign investor involves.

Documentation for Non-Residents

To secure a mortgage as a foreign investor in Portugal, you’ll need to provide several necessary documents. These may include:

  • A copy of your passport
  • Proof of income
  • Personal bank statements
  • A Portuguese Tax Number (NIF)

Ensuring you have all the necessary documentation in place can streamline your mortgage application process.

Investment Opportunities and Rental Income

Apart from owning a beautiful property in Portugal, foreign investors can also benefit from property investment and rental income. Regions such as Lisbon and the Algarve are known for providing high rental incomes, making them ideal locations for property investment.

If you’re considering renting out your property, you’ll need to register the property as tourist rental accommodation with the local town hall and obtain a rental license.

Preparing for the Legalities

Securing a Portuguese mortgage entails navigating multiple legal aspects. These include signing property and mortgage deeds, understanding the role of a notary, and meeting insurance requirements. Understanding these legalities and preparing for them in advance can ensure a smooth and successful mortgage process.

Signing Deeds and Contracts

An essential part of the mortgage process involves signing the property and mortgage deeds. These documents are signed in the presence of a notary, who ensures the transparent and legally enforceable transfer of property ownership. The notary’s signature and stamp on the document serve to legalize the property purchase, making it officially binding.

Life Insurance and Home Loans

Another key aspect of obtaining a mortgage in Portugal is life insurance. Most lenders require borrowers to have life insurance that covers the loan amount. This insurance serves to protect the lender in the event of the borrower’s death or incapacity. Depending on the lender, you may also be required to have home insurance.

Special Considerations for Various Borrowers

Although the mortgage process is fairly similar for all borrowers, specific groups may encounter unique challenges or requirements. Retirees, for instance, need to demonstrate a stable pension income and may face age restrictions. Self-employed individuals, on the other hand, may need to provide additional documentation to prove their income.

Let’s explore these special considerations in more detail.

Mortgages for Retirees

If you’re a retiree considering a property investment in Portugal, you’ll be pleased to learn that you can still qualify for a mortgage. However, you’ll need to demonstrate a regular pension income and may face age restrictions depending on the lender.

Remember, the key is to show that you have a stable income that can comfortably cover your mortgage repayments.

Self-Employed Applicants

For self-employed individuals, the mortgage application process can be slightly more complex. Portuguese lenders may require additional documentation to verify your income, such as your latest tax return and company accounts. However, don’t let this put you off.

With appropriate preparation and documentation, self-employed individuals can effectively secure a Portuguese mortgage.


Whether you’re a resident, a retiree, or a foreign investor, securing a mortgage in Portugal is a feasible goal with the right preparation. From understanding the different types of mortgages to navigating the various fees and taxes, we hope this comprehensive guide has provided you with valuable insights into the Portuguese mortgage landscape. Here’s to a successful property investment journey in Portugal!

Frequently Asked Questions

Can a foreigner get a mortgage loan in Portugal?

Yes, both residents and non-residents can access mortgage options from Portuguese banks, with the maximum amount one can borrow depending on the loan-to-value ratio. So, as a foreigner, you can get a mortgage loan in Portugal.

How much deposit do you 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. This is because financial institutions generally provide between 60 percent to 70 percent of the valuation price in credit.

What documents do I need for a mortgage in Portugal?

To apply for a mortgage in Portugal, you will need your passport, Portuguese tax number, proof of address, credit report, bank statements for the last 3 months, and valuations of your investment portfolio. Ensure you have these documents ready to start the process.

What types of mortgages are available in Portugal?

In Portugal, you can find fixed-rate and variable-rate mortgages to suit various needs and preferences. Choose the best option based on your specific requirements.

What is the role of a mortgage broker in the mortgage application process?

A mortgage broker plays a crucial role in the mortgage application process by acting as an intermediary between you and potential lenders, guiding you through various mortgage options and negotiating favorable terms on your behalf.

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Ana Fankhauser

Ana has worked in many startups and moved to a few countries, which led her to create MovingTo. She believes that remote work is a growing trend that is here to stay and that digital nomads will move to countries that have more to offer than the ones you were born into. She mostly writes opinion pieces for MovingTo.

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