Updated: August 14, 2025

Are you looking to buy property in Portugal, or are you exploring this as a viable option? The Portuguese property market is booming, and buying your dream home or finding a perfect investment property to rent out can be exciting. However, you may be concerned about financing options and whether you can get a mortgage in Portugal as a foreigner.

In this article, we will cover how to get a mortgage in Portugal and what to look for in your mortgage agreement. We will equip you with everything you need to know about financing your property in Portugal and mortgages in Portugal – from property and mortgage deeds to property tax.

Taking Out a Mortgage in Portugal: An Overview

 

Nazare-luxury-real-estatePortugal is known for being exceptionally welcoming towards expats. From the friendly people and well-established expat communities to the various visa options and foreigner-friendly mortgage brokers and banks, expats are able to settle in easily.

With Portugal mortgage rates ranging from 2.3 to 3.8 percent based on a 60 to 80 percent loan-to-value ratio (the ratio of the loan amount to the value of the property pledged as collateral), the loan terms and mortgage repayments are also quite affordable.

Why should I take out a Portuguese loan to buy property in Portugal?

If you’re planning to use a mortgage loan to finance your property purchase, you can either get a Portuguese loan or take out an additional mortgage in another country if you already own property with sufficient equity there.

However, Portuguese mortgage lenders are currently showing increasing interest in helping foreigners with loans, which could work to your advantage. Interest rates are also relatively low in Portugal, leading to favorable mortgage terms.

Can foreign buyers get a mortgage in Portugal?

Getting a mortgage in Portugal for foreigners is a simple process, and international buyers face no restrictions when buying property. Foreign buyers will be happy to know that the process for mortgages in Portugal for non-residents is quite similar to residents, except for differences in some of the mortgage terms.

Whether you are a permanent resident, an expat, or investing in property from abroad, you are most likely to be offered a mortgage by a Portuguese lender if you have a good credit score and history, as well as a reliable income through stable employment, passive investment income, or business ownership.

Benefits of getting a mortgage in Portugal

Portugal prides itself on the way it welcomes visitors and investors, and you’ll easily find many options to secure a mortgage for a property in Portugal from various local banks with the help of an independent mortgage broker.

A mortgage is the most common way to finance your property purchase in Portugal. Some of the benefits of taking out a mortgage in Portugal are:

  • There is increased interest from Portuguese mortgage lenders in assisting foreigners with lending solutions.
  • The Portuguese mortgage lender will carry out legal checks.
  • The lender will arrange for a valuation to take place.
  • There are low mortgage rates in Portugal.
  • Mortgages in Portugal are available to both residents and foreigners.
  • In Portugal, properties purchased on credit can be rented out without restrictions, therefore reducing risks.

Before accepting a formal mortgage offer, it’s important to ensure that the property you are purchasing has gone through the proper checks. To do this, you may want to consider seeking the services of a Portugal real estate lawyer, who can also assist with legal aid at various points throughout the process of purchasing a home in Portugal.

The services a real estate lawyer in Libson can provide include, but are not limited to:

  • Overseeing the purchasing transaction from start to finish
  • Remote handling of bureaucratic procedures
  • Checking whether any outstanding debts are attached to the property
  • Checking who the legal owner(s) is/are and that they have the right to sell the property
  • Checking the construction history of the property (property valuation)
  • Drawing up contracts and documents, such as the reservation agreement
  • Reviewing the purchase and sale agreement and advising you on its legal consequences and obligations
  • Requesting necessary legal documents for the property
  • Providing Portuguese real estate legal advice about everything from mortgage repayments to having contract life insurance

The services of a buyer’s agent, like Goldcrest, are also invaluable during the buying process. Goldcrest offers local market expertise as property experts to help you find the best deal on your property and navigate the language barrier during negotiations.

At what stage should I apply for a mortgage in Portugal?

Once you have made the decision to buy property in Portugal, it is best to start the mortgage process as early as possible – even before you start looking for the property you want to buy.

Starting the process early by reaching out to a mortgage broker to see what you can realistically afford will help you to accurately determine your budget before searching for the home you wish to purchase. It will also give you the upper hand in negotiations, showing you are a serious buyer.

Compare mortgages from different banks

Portugal has over 15 banks that provide mortgage loans, including BBVA, Santander, Banco Best, Millenium BCP, and Banco CTT, among other banks in Portugal. Depending on your unique circumstances and requirements, it’s a good idea to work with a mortgage broker to compare what a few of the banks will offer you before deciding on which bank to go with.

What types of mortgages are available in Portugal?

There are a few different mortgage loan options to choose from if you need to finance your property purchase in Portugal.

Fixed-rate mortgage

Fixed-rate mortgages allow property owners to pay a constant rate for a certain period. These mortgages are offered for anywhere between 3 and 30 years, with banks charging a significant premium for a fixed-rate mortgage. The advantage is that borrowers are generally protected against fluctuations in Euribor rates.

Variable-rate mortgage

Variable-rate mortgages depend on the mortgage spread – a fixed percentage of interest – offered by the bank you borrow from. Currently, the mortgage spread is sitting around one to two percent for the majority of financial institutions.

The monthly payments on a variable-rate mortgage fluctuate over time depending on the indexer (Euribor) and your variable-rate mortgage period, which can be between 3, 6, and 12 months. Over the repayment period, the monthly payments on variable-rate mortgages are usually revised. Also, you may have to pay a minimum fee on the repaid capital if you decide on early repayment.

Mixed-rate mortgage

This mortgage type combines a fixed period with a variable period, offering a balance of stability and potential cost savings. According to the Bank of Portugal, 70 percent of new mortgages are now mixed-rate. This type has become popular for its flexibility during uncertain economic times.

 

What are the current mortgage rates in Portugal?

Foreigners might face higher mortgage rates due to perceived risk, but competitive rates are available from select lenders.

The current mortgage rates in Portugal vary depending on your financial profile and the type of mortgage you choose.

  • Fixed mortgage rates typically range from 2.5 to 3.8 percent.
  • Variable mortgage rates are between 2.3 and 3.2 percent.
  • Mixed mortgage rates, which combine a fixed period with a variable rate, can range from 2.7 to 3.5 percent.

These rates can vary depending on the loan term and the borrower’s individual circumstances (borrower profile). Other factors influencing the mortgage rates include the Euribor rate, the European Central Bank’s interest rate decisions, and bank lending policies.

Factors that can affect the mortgage rate

Mortgage rates in Portugal are influenced by the European Central Bank’s policies and the overall economic climate. The main factors influencing the rate you will receive include:

  • The property price: The value of the property you would like to buy will influence your rate.
  • The deposit size: The size of your down payment will influence the rate you are offered.
  • Financial history: Your credit history is a significant influencing factor.
  • The mortgage type: You will be offered a different rate depending on whether you opt for a fixed or variable-rate mortgage.
  • The current Euribor rate: The Euribor rate is a key influence on Portugal’s mortgage rates.

Mortgages in Portugal for Retirees

The minimum age to apply for a mortgage loan is 18, with no official upper age limit. However, borrowers over 70 may face challenges due to the typical 25 to 30-year mortgage terms of mortgages in Portugal for non-residents. Retirees in Portugal with a regular pension can also get a mortgage.

Something else to bear in mind is that life insurance is a standard loan requirement, and if you are over 60 years old, getting life insurance in Portugal at this age can be fairly difficult.

Mortgages in Portugal for Businesses

For mortgages in Portugal for business purposes, the maximum amount is usually 50 percent of the purchase price (or, if lower, the valuation stated in the valuation report).

How much do I need to deposit?

  • For a Portuguese mortgage, the minimum deposit is usually about 20-40 percent of the purchase price for non-residents.
  • Financing institutions provide between 60 and 80 percent of the valuation price for non-residents.

Mortgage Conditions

As to be expected, there are basic conditions to consider when taking out a foreign investor mortgage in Portugal. These include the interest rate based on the Euribor, the term of the mortgage (usually 25-30 years), the lending criteria, and the requirement to contract life insurance or home insurance.

Costs and fees for mortgages in Portugal

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Cost of purchasing a house in Portugal

In addition to the purchase price of the property, it is useful to be aware of the additional costs of purchasing a house in Portugal. These include:

  • Property transfer tax (IMT): 0 to 10 percent, depending on the purchase price, the location of the property, and whether it is your first or second home in Portugal
  • Stamp Duty Tax (IMI): 0.8 percent of the price of the property
  • Notary, registry, and tax office fees for property deeds: €500 to €1,000, plus €250 for Land Registry
  • Legal fees: Around €2,000 to €5,000

Cost of taking out a mortgage in Portugal

mortgage-calculator-PortugalThe costs you should expect when taking out a mortgage loan in Portugal include:

  • €290 application fixed fee
  • €280 bank valuation fee
  • Stamp Duty Tax (IMI): 0.6 percent of the amount of the mortgage
  • Notary and tax office fees for property deeds: €500 to €1,000

Property prices in Portugal

Buying a property in Portugal is affordable when compared with other Western European countries. The housing market has moved from strength to strength in recent years and is an attractive market for both foreign investors and homebuyers.

In 2024, the average asking price for a house in the Lisbon Metropolitan Area, property prices stood at €4,935 per square meter and €6,934 per square meter in Lisbon city center. House prices will vary, however, depending on the type of property you are looking to purchase. It is also important to keep in mind that luxury properties in Portugal will be more expensive.

Compared with other Western European countries, you should also find prices to be quite reasonable. Note that popular areas, such as buying property in Lisbon or the Algarve, will be more expensive than other parts of the country.

At present, Portugal’s highly skilled workforce, booming tourism industry, world-class infrastructure, business-friendly environment, and easy access to markets are among several factors that have contributed to a continuous and steady flow of investments into different economic sectors over the past few years.

Useful Terminology and Acronyms

How-to-get-a-mortgage-in-Portugal-pngHere are some useful terms and acronyms so that you are well-versed in understanding the basics of mortgages in Portugal and taxes when buying property in Portugal.

TAN – Taxa Anual Nominal, the TAN is commonly known in English as the Annual Percentage Rate (APR). The variable TAN is the sum of the spread and the indexing rate, which is usually Euribor, for 12 months.

Euribor – The Euro Interbank Offered Rate is a daily reference rate based on the average interest rates at which Eurozone banks offer to lend to other banks in the euro wholesale money market (also known as the interbank market). You can see the 12-month Euribor Rate online.

TAEG – Taxa Annual de Encargos Efetiva Global is the sum of TAN and other lender costs, such as origination fees, required insurance, and so on. This rate is effectively used to compare similar mortgage loan options from different banks.

How to Apply for a Mortgage: A Step-by-Step Guide

The application process begins with an initial approach to the bank or mortgage broker. Having an experienced mortgage agent on your side will make securing the best deal for your situation much simpler.

They will proceed to supply you with a no-obligation estimate or preliminary analysis. This is often done at the branch level. It is important to have a documentation copy ready for the banker or mortgage agent to analyze and give you feedback.

A six-step process is then laid out, from getting a quote to signing the property deeds and mortgage deeds:

  1. Mortgage quote
  2. Application forms delivery
  3. Formal mortgage offer
  4. Valuation report
  5. Completion arrangements
  6. Payment (all the associated mortgage-related fees, minimum deposit, tax office fees, and taxes) and signing (property deeds and mortgage deeds)

Mortgage-related fees can include:

  • Property and mortgage deeds registration
  • Mortgage arrangement and administration
  • Non-refundable commitment fee
  • Survey and appraisal
  • Legal fees

Work out the mortgage rates

mortgage

The cost of the mortgage loan depends on the applicant’s financial status. The mortgage lender will measure your ability to maintain the loan. The spread or interest loans that the bank charges are a measure of the bank’s valuation of risk.

In Portugal, the interest rate charged is generally Euribor, plus the spread. This adds to the spread charged by the banks, which is currently one to two percent.

Mortgage agents will often approach various banks in Portugal. The goal is to secure the most competitive rates for you.

How to pick the right Portuguese bank for your mortgage

Many people will focus on the pricing of a mortgage facility. Yet, there are other important factors to consider:

  • Some banks have a mandatory life insurance obligation that adds to the cost of a mortgage. It is usually best to avoid it for many non-residents.
  • Some lenders may have more competitive interest rates, but a cap on how much you can borrow.
  • Some banks may offer variable-rate mortgages only, not fixed-rate products.
  • Different banks will have different requirements when analyzing how much you can pay for a given loan amount.
  • Some banks will emphasize certain types of income streams more than others.
  • Some banks may not consider renting.
  • Some banks will respond differently to income value.

This illustrates that some profiles are better suited than others for certain banks when it comes to getting formal mortgage approval.

The important factor is to make sure that your information is carefully examined and that, whenever possible, you are given several suggestions that may work for you before deciding on the one to go for.

Documents required to get a Portuguese mortgage

property prices in madeiraIf you are going to apply for a mortgage in Portugal, you have to submit the following documents for your initial assessment:

  • Copy of passport
  • Portuguese tax number (also called a NIF number)
  • Proof of income
  • Bank statements
  • A recent utility bill
  • Recent mortgage statements
  • Proof of any savings or investment income accounts
  • Bank reference letters
  • Property details – buying commitment or sales contract

These documents vary depending on your employment status. You should include the length of time that you have been in the company/employed/self-employed and demonstrate your gross annual salary.

If employed:

  • The previous year’s income tax returns
  • Salary income, as shown through the past three months’ pay slips
  • Reference letter from employer

If self-employed (hold a 20 percent or more share in a limited company):

  • Last year’s income tax return
  • Last three months of business bank statements
  • Three years of company profit and loss statements and balance sheets

Other income:

  • Confirmation of pension income for the last three months
  • Copy of tenancy agreement for rental properties
  • The last three months of bank statements showing rental income received
  • Copy of investment certificates

Please note that the bank may request more documents.

Practical Information to Know about Mortgages in Portugal

In addition to the application process and the costs involved, here’s some other practical information to know about the maximum loan-to-value and the lending criteria for a mortgage in Portugal.

What is the maximum loan-to-value for Portuguese mortgages?

The maximum loan-to-value for Portuguese mortgages will differ based on your residency status.

  • For non-residents: A loan-to-value between 60 percent and 80 percent of the property’s purchase price
  • For residents: More flexible mortgage options, including higher loan-to-value ratios of 80 to 90 percent

What are the lending criteria for a mortgage in Portugal?

buy-to-let-mortgagesPortuguese banks will consider your ability to pay the mortgage for the whole term in the application process. To establish your affordability and how much you can borrow, the bank will calculate your debt-to-income ratio (DTI) rather than just looking at your annual income.

This ratio compares your total monthly debt obligations (existing loans, rent, credit card debt, and your future mortgage repayment) to your total monthly income. For example, if you earn €4,000 monthly and have €1,000 in monthly debt payments, your DTI ratio is 25 percent.

The Central Bank of Portugal advises a debt-to-income ratio at least lower than 50 percent (in other words, your income should be double the amount of your debt repayments), however, most Portuguese banks prefer a DTI of no more than 45 percent.

Stricter lenders may even set the limit as low as 35 percent, especially for borrowers with less stable income or fewer assets. On the other hand, high-net-worth individuals with strong financial profiles may be allowed a DTI of up to 50 percent.

This is a very simplified description of how the bank makes its decision. Each institution will also consider other financial indicators, like your credit score, before making a loan offer. Always consult the bank or your agent for a more accurate assessment.

Competitive mortgage rates in Portugal for Americans

Portugal has some of the most attractive mortgage rates in Europe, especially when compared with the USA. Portuguese mortgage rates currently range from 2.5 to 3.8 percent, depending on the loan type and the applicant profile. In the USA, mortgage rates often surpass 7 percent, making the cost of borrowing much higher.
See our full guide to mortgages in the USA vs Portugal for a deeper comparison.

What is the mortgage in Portugal calculator?

A mortgage calculator in Portugal estimates the monthly repayments based on mortgage rates for home financing for foreigners in Portugal. Some Portuguese lenders may also offer first-time home buyer programs or incentives.

Based on the property value, consider all the financial aspects related to the mortgage rates in Portugal in 2025, including your net borrowing, mortgage insurance, property tax, and the list of financial considerations pertaining to the mortgage application process below:

  • Your credit score: A risk assessment of your credit files, used to determine your creditworthiness and financial stability
  • Debt-to-income ratio: Your monthly debt payments divided by your gross monthly income
  • Loan-to-value ratio (LTV): The ratio of the loan amount compared to the property value
  • Amortization schedule: The breakdown of monthly mortgage payments over time, including the interest rate
  • Insurance: Property insurance and mortgage life insurance requirements for securing a mortgage
  • Early repayment fees: If the mortgage is paid off early, you will be charged a small fee. You will also be taxed on repaid capital if you sell the property.

Try our mortgage calculator to get an accurate estimate of your payments.

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Key Takeaways: Getting a Mortgage in Portugal

Navigating mortgages in Portugal requires attention to detail and invaluable local knowledge and support. When getting a mortgage as a foreigner buying property, understanding the terms, interest rate, and impact on your financial position is crucial.

Here, we summarize the key takeaways of applying for a mortgage for property in Portugal, including considerations to keep in mind that will make your venture into the Portuguese real estate market a seamless and rewarding experience. You can also read our e-book about buying property in Portugal for a full overview of the buying process. 

  • How mortgages work in Portugal: Mortgages in Portugal usually feature fixed, variable, or mixed interest rates. The base rate is Euribor, onto which banks add their margins.
  • Qualifying mortgage requirements in Portugal: Eligibility for a mortgage in Portugal requires a solid credit history, stable income, and the ability to manage monthly payments.
  • Compare banks for the best mortgage rate: To secure the best mortgage rate, it’s crucial to compare rates from various lenders. The following banks and institutions offer diverse mortgage loans: BBVA, Santander, Banco Best, Bankinter, and Banco CTT.
  • The mortgage term in Portugal: The most common mortgage term in Portugal is 30 years, although flexibility exists for shorter or longer durations.
  • The down payment on a house in Portugal: The minimum down payment for foreigners is usually 20-40 percent of the purchase price, though some lenders may require up to 50 percent.
  • The qualifying age limit for a mortgage in Portugal: The minimum age limit is 18 to apply for a mortgage. However, there isn’t an official age limit. Borrowers above 70 might encounter hurdles in securing loans because mortgages for non-residents typically span 25 to 30 years.

Goldcrest: Property Specialists to Help You Find Your Dream Property

Goldcrest is a buyer’s agent that is based in Lisbon, Porto, and the Algarve. Equipped with local knowledge, exclusive networks, and international experience, we provide expert, impartial advice on real estate investments and how to buy property in Portugal.

From scouting out the perfect property through to property acquisition, we have you covered throughout the process. Our team of skilled experts is available to cater to all your real estate needs, offering insightful expertise and strategic advice. Book a complimentary call with us today.

Frequently Asked Questions About Getting a Mortgage in Portugal

In Portugal, homebuyers can choose between fixed-rate and variable-rate mortgages or a combination of the two, known as mixed-rate mortgages.

Fixed-rate mortgages offer stability for a set period (3-30 years) but come at a premium. Variable rates are influenced by Euribor and the bank’s spread, offering potential savings but with fluctuation risk.

Portuguese banks offer mortgages to residents and non-residents. If you do not have a fiscal representative or a buyer’s agent, you can approach a major Portuguese financial institution – such as Santander, Novo Banco, BBVA, EuroBic, or Bankinter – directly.

The key benefit of taking out a Portuguese mortgage is that Portuguese mortgage lenders can offer valuable services and benefits that include property valuation to take place, tailored interest rates, and favorable repayment terms.

In Portugal, the IMT, or property purchase tax, should be paid separately from the mortgage payments.

Yes, foreigners can get a mortgage in Portugal without restrictions. This includes UK and US citizens.

A mortgage lender will only deem your application unsuccessful if you do not meet the eligibility criteria.

Getting a Portuguese mortgage is very common, and you will be able to secure a mortgage regardless of whether you are a resident or are looking for mortgages in Portugal for non-residents. Many banks offer mortgage loans in Portugal, often at more favorable terms than in other countries, such as the US.

To apply for a mortgage in Portugal, you will need to have the following:

  • Copy of passport
  • Portuguese tax resident number (NIF number)
  • Proof of income
  • Bank statements
  • Recent utility bills
  • Recent mortgage statements
  • Proof of any savings or investment accounts
  • Bank account reference letters
  • Property details – buying commitment or sales contract

You will also be required to show additional documents, which will depend on your employment status. If you are a retiree, you must be able to prove a regular pension income. Please note that the bank may request more documents in addition to proof of your pension income.

The current mortgage rates in Portugal vary depending on your financial profile and the type of mortgage you choose.

Fixed-rate mortgages typically range from 2.5 to 3.8 percent, while variable rates are between 2.3 and 3.2 percent. Mixed rates, which combine a fixed period with a variable rate, can range from 2.7 to 3.5 percent.

At the beginning of the lending process, Portuguese mortgage lenders will conduct a debt-to-income ratio assessment. This assessment entails taking your monthly debt payments, such as loans and other mortgages, and dividing this by your gross monthly income.

A debt-to-income ratio between 35 and 40 percent is usually most acceptable. If your application is approved, the lenders can then assist with the necessary legal checks for the property and arrange a valuation.

In Portugal, the minimum deposit required for a mortgage depends on your residency status. Non-residents typically face a higher hurdle, needing to put down at least around 20-40 percent of the property’s purchase price. This is because mortgage lenders in Portugal usually only provide between 60 and 80 percent of the valuation price for non-residents.

Depending on the mortgage lenders you work with, a Portugal mortgage for expats will only cover between 60 and 80 percent of the property’s purchase price for non-residents.

You’ll incur a stamp duty tax of 0.8 percent of the property price. Factor in notary and tax office fees, which total around €500- €1,000 and Land Registry fees of €250 for the mortgage deeds. Finally, there’s the property tax/purchase tax (IMT), ranging from 0 to 10 percent of the property price, depending on the specific property and location.

In Portugal, the bank evaluates property value for mortgages by scrutinizing various factors. They analyze credit scores to gauge creditworthiness, calculate debt-to-income ratios, and assess loan-to-value ratios. Additionally, they consider amortization schedules, insurance requirements, and potential early repayment charges.

Yes, in Portugal, you can repay your mortgage early, but it may incur penalties. If you choose early repayment, a small fee of around 0.5 percent of the property value, accounting for taxes, applies. Additionally, upon property sale, you’re taxed on the repaid capital. These penalties are considerations for borrowers planning early mortgage settlements.

When securing a mortgage in Portugal, certain insurance is mandatory. This includes property insurance and mortgage life insurance. Some banks impose an obligatory requirement for life insurance to ensure repayment in the event of unexpected circumstances. These insurance policies are essential components of the mortgage application process in Portugal.

There are no government incentives or programs to help non-residents purchase property in Portugal. However, the Portuguese government does offer subsidized housing loans and tax benefits for first-time home buyers who are Portuguese residents, such as the IMT exemption for first-time buyers.

The long-term interest rate in Portugal was 3.02 percent as of June 2025. 

Most banks in Portugal offer a maximum loan-to-value (LTV) of 60 to 80 percent for non-residents, although this could vary.

The amount you can borrow typically depends on your income, but the minimum deposit you will require is usually at least 20 percent of the purchase price of the property.

Mortgage lenders typically look at income, employment status, credit history, and existing debts to determine eligibility against the value of the property.

Portugal offers affordable property prices, attractive residency programs, and beneficial mortgage rates, making it a smart choice for real estate investment. It also places no restrictions on foreign buyers, making the process straightforward.

Most banks have a maximum age limit between 60 and 70 years old, but the mortgage may carry on into retirement, provided you have sufficient pension income. The minimum age is 18.

Yes, retirees can get a mortgage in Portugal as long as they can demonstrate a stable income or pension. However, it gets more difficult to find a bank to offer a mortgage after 70 years old.

The process usually takes one to four months, although it can take longer depending on factors like property searches, financing, and legal checks.

While the process involves certain requirements, paperwork, and checks, it’s generally a straightforward process, especially with professional guidance from a mortgage broker.

Non-residents have access to fixed-rate and variable-rate mortgages in Portugal, with terms between 25 to 30 years and based on 60 to 80 percent loan-to-value mortgages.

Residents have more flexible mortgage options, including higher loan-to-value ratios of between 80 to 90 percent.

Yes, mortgages in Portugal for UK residents are possible.

Both Portuguese residents and non-residents can apply for mortgages in Portugal.

Conditions vary but often include a loan-to-value of 60 to 80 percent, with a 20 to 40 percent down payment typically required for non-residents. The mortgage term is usually between 25 to 30 years.

The Portuguese housing market in 2025 continues to experience sustained growth, especially in popular areas like Lisbon and the Algarve, due to strong foreign investment and some new construction. While prices are rising in these hotspots, there’s also growing interest in more affordable regions of the country.