{"id":5565,"date":"2020-02-10T10:37:59","date_gmt":"2020-02-10T10:37:59","guid":{"rendered":"https:\/\/casaportugal.co.il\/%d7%9e%d7%a9%d7%9b%d7%a0%d7%aa%d7%90-%d7%91%d7%a4%d7%95%d7%a8%d7%98%d7%95%d7%92%d7%9c\/"},"modified":"2023-05-22T02:00:28","modified_gmt":"2023-05-22T02:00:28","slug":"a-mortgage-in-portugal","status":"publish","type":"post","link":"https:\/\/casaportugal.co.il\/en\/a-mortgage-in-portugal\/","title":{"rendered":"A mortgage in Portugal"},"content":{"rendered":"

If you need a mortgage in Portugal, in order to finance the purchase of real estate in Portugal <\/a>, it would be wise to start settling the mortgage almost before you do anything else.
\nA careful due diligence will allow you to get a better idea of how much you can afford to pay for the property purchase in Portugal and meet the monthly payments.
\nThe financial aspect of purchasing the property must be fully understood. The lack of understanding could leave you with a less attractive mortgage and a higher interest rate.<\/p>\n

Loan conditions in Portugal<\/u><\/p>\n

Banks in Portugal allow mortgages to eligible people, including foreigners, who purchase properties in Portugal.<\/p>\n

Banks usually offer loan terms of up to 50 years for residents and 30 years for non-residents. The maximum age for repaying the loan is 70 or 80, depending on the bank.<\/p>\n

down payment\u00a0 <\/u><\/p>\n

You will usually need a minimum down payment of 20% of equity from the property’s purchase price, because loans vary between 60% and 80% of the purchase price or the bank appraiser’s appraisal price.<\/p>\n

Fixed or variable rate?<\/u><\/p>\n

Most Portuguese banks offer different types of mortgage repayment options at a fixed or variable rate.<\/p>\n

Variable interest rate mortgage<\/u><\/p>\n

The interest rates in Portugal for a variable rate mortgage are linked to the European Central Bank (Euribor) for 3 months or 6 months and the rate increases with the profit that the bank applies. The Euribor rate is set by a panel of European banks on a daily basis and is usually an indicator of what rate European banks will lend to each other. The early redemption penalty for a mortgage for purchase at a variable rate is 0.50% in accordance with the regulation of the Bank of Portugal.<\/p>\n

A mortgage with a fixed interest rate<\/p>\n

A fixed interest mortgage allows you to budget for future mortgage payments since the monthly cost will remain constant throughout the entire mortgage period and you are protected against future increases in the European base rate. A fixed interest rate mortgage is available at some banks and the fixed rate period can range from one to thirty years. After the end of the fixed rate period, the mortgage is automatically converted to a variable interest rate mortgage (unless the rate is fixed for the entire loan period). The early redemption penalty during the fixed interest period is 2% in accordance with the regulation of the Bank of Portugal.<\/p>\n

Criteria for loans<\/u><\/p>\n

The banks take into account the following two criteria when analyzing the approval of your mortgage portfolio: your financial situation and the value of the property.<\/p>\n

Economic situation<\/u><\/p>\n

The bank will require proof of your current income such as salary income, dividend payments, investment income, pension income and rental income. The banks consider the net income of each applicant confirmed by payslips\/pension, tax returns and bank statements. The bank will also request information on any existing debts and employment history. All this information will help the bank decide if you will be financially comfortable to meet the monthly costs of the mortgage.<\/p>\n

Assessment of the property<\/u><\/p>\n

The bank will invite an appraiser on its behalf to evaluate the designated property.
\nThe banks usually lend between 80%-60% of the appraisal price.<\/p>\n

Documents<\/u><\/p>\n

The banks will require a variety of supporting documentation to examine the mortgage application and it may include the following documents:<\/p>\n