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Thinking about buying property in Portugal but unsure how to finance it? The good news is that foreigners can obtain mortgages in Portugal, whether you are an expat, investor, or non-resident buyer.
Portuguese banks regularly lend to international clients and typically finance 60–70% of the property value for non-residents, while residents may access higher loan-to-value ratios.
In this guide, we explain everything you need to know about mortgages in Portugal, including eligibility, interest rates, required documents, and the step-by-step mortgage application process.
Can Foreigners Get a Mortgage in Portugal?
Yes. Foreigners can obtain mortgages in Portugal even if they are not residents of the country. Portuguese banks are comfortable lending to international buyers, particularly those purchasing property for relocation, investment, or a second home.
Generally:
- Residents may finance up to 80–90% of the property value
- Non-residents typically receive financing up to 60–70%
Banks evaluate several factors before approving a mortgage, including income stability, credit history, and overall financial health.
If you’re planning to buy property, you may also want to read our guide on Buying Property in Portugal.
Mortgage Conditions in Portugal
When applying for a mortgage in Portugal, banks evaluate several key lending conditions.
Interest Rate
Mortgage interest rates are usually linked to the Euribor, plus a fixed bank margin known as the spread.
Loan Term
Mortgage terms typically range between 10 and 30 years, depending on the borrower’s age and financial profile.
Loan-to-Value (LTV)
The LTV ratio determines how much the bank is willing to finance relative to the property price.
Typical LTV ratios:
- Residents: up to 80–90%
- Non-residents: around 60–70%
Debt-to-Income Ratio
Banks also evaluate the borrower’s debt-to-income ratio, which typically should not exceed 35–40% of monthly income.
Insurance Requirements
Most Portuguese mortgages require:
- Life insurance linked to the loan
- Property insurance covering the structure of the home
Benefits of Getting a Mortgage in Portugal
Financing property through a mortgage can provide several advantages.
Long Repayment Terms
Portuguese mortgages often allow repayment periods of up to 30 years, making monthly payments more manageable.
Competitive Interest Rates
Mortgage rates in Portugal are generally competitive compared to many European markets.
Accessible to Foreign Buyers
Non-residents can obtain mortgages without needing Portuguese residency, making property investment accessible to international buyers.
Investment Potential
Mortgage financing allows investors to leverage their capital while generating rental income.
If you plan to rent the property, understanding the property taxes in Portugal is also important:
Types of Mortgages Rates in Portugal
When financing property, buyers can choose between different mortgage rate structures depending on their financial strategy.
Fixed-Rate Mortgage
A fixed-rate mortgage keeps the interest rate unchanged during the fixed period. Monthly payments remain stable, providing predictable costs.
This option is popular among buyers who prefer financial stability and protection from interest rate increases.
Variable-Rate Mortgage
Variable-rate mortgages are linked to the Euribor, plus the bank’s spread.
Monthly payments may increase or decrease depending on market interest rates.
This option can be attractive when Euribor rates are low.
Interest-Only Mortgage
Interest-only mortgages are less common but may be available for specific investment scenarios.
During the initial period, borrowers pay only the interest portion of the loan, keeping monthly payments lower. The principal must still be repaid later.
Get In Touch With Us
Portugal Residency Advisors® has helped hundreds of international families and investors secure residency, citizenship, and investments in Portugal. Get in touch with a specialist today and discover how we can help you start your journey to Portugal.
Step-by-Step Process of Getting a Mortgage in Portugal
Understanding the mortgage process helps ensure a smooth property purchase.
1. Research Banks or Mortgage Brokers
Start by comparing lenders that work with foreign buyers. Many buyers choose to work with a mortgage broker who can compare offers across multiple banks.
You can learn more about the buying process in our guide.
2. Gather Required Documentation
Prepare financial documentation before applying. This helps speed up the mortgage approval process.
3. Submit the Mortgage Application
Once you choose a lender, submit your mortgage application along with the required documentation.
The bank will review your financial profile and credit history.
4. Receive the Mortgage Offer
If approved, the bank issues a formal mortgage proposal outlining:
- Loan amount
- Interest rate
- Loan term
- repayment conditions
5. Property Valuation
The bank conducts a property valuation to confirm the property value aligns with the loan amount.
6. Sign the Final Deed
Once the mortgage is approved, the loan is finalized during the property deed signing.
For legal protection during this stage, many buyers work with a Portugal real estate lawyer.
Documents Required to Get a Mortgage in Portugal
Banks usually require the following documents when reviewing a mortgage application.
Typical documents include:
- Passport
- Portuguese tax number (NIF)
- Proof of address
- Credit report
- Last three pay slips
- Recent bank statements
- Latest tax return
- Property documentation
Foreign buyers often obtain a NIF before applying for a mortgage.
Costs and Fees for Mortgages in Portugal
In addition to the property purchase price, buyers should plan for several additional costs.
Typical mortgage-related costs include:
- Property valuation fee
- Mortgage opening fee
- Notary and registration costs
- Insurance policies
- Stamp duty on the mortgage
These costs usually represent 1–2% of the loan amount.
Best Banks for Mortgages in Portugal
Several Portuguese banks regularly lend to international buyers.
Popular lenders include:
- Novo Banco
- Santander Totta
- Millennium BCP
- Caixa Geral de Depósitos
- UCI
Why Work With a Mortgage Broker in Portugal
Navigating the mortgage market in Portugal can be complex, particularly for foreign buyers. Working with a mortgage broker can simplify the process and help you secure better financing conditions.
If you want to understand the advantages in detail, read our guide on Why Work With a Mortgage Broker in Portugal.
Access to Multiple Banks
Mortgage brokers can compare offers from several lenders, helping you find the best mortgage conditions.
Expert Guidance
They explain the differences between mortgage options and help you understand interest rates and repayment terms.
Saves Time
Instead of contacting multiple banks, the broker handles the negotiations and paperwork.
Specialized in Foreign Buyers
Many brokers specialize in assisting international clients, simplifying the mortgage process for non-residents.
Most brokers are paid by the bank, meaning their service typically does not add additional cost for the borrower.
For more videos about investing or moving to Portugal, explore our YouTube channel here: YouTube Channel Portugal Residency Advisors.
Portuguese Mortgage Glossary
Understanding common mortgage terms can help when reviewing loan offers.
TAEG: The Portuguese equivalent of APR. It reflects the total cost of the mortgage, including interest and mandatory fees.
Euribor: A benchmark European interest rate used for most variable mortgages.
Spread: The bank’s margin added to the Euribor rate.
LTV (Loan-to-Value): The percentage of the property price the bank is willing to finance.
Tenor: The total duration of the mortgage loan.
Why Work With Us
At Portugal Residency Advisors®, we collaborate with carefully chosen premium mortgage brokers in the market.
We streamline the entire process of applying for a mortgage, handling all the paperwork from obtaining your NIF number to opening your bank account, and liaising with our mortgage partners on your behalf.
Working with us can save you time, effort, and even money in the long run.We’ll help you avoid common mistakes and pitfalls that many expats or first-time home buyers encounter, and provide peace of mind throughout the entire process.
So if you’re ready to find your dream home, consider partnering with us to make the process smooth and stress-free.
Frequently Asked Questions
Can foreigners get a mortgage in Portugal?
Yes. Foreigners can obtain mortgages in Portugal even if they are not residents. Portuguese banks regularly lend to international buyers purchasing property for relocation, investment, or a second home. However, non-residents usually receive financing of around 60–70% of the property value, while residents may qualify for higher loan-to-value ratios.
How much deposit do I need for a mortgage in Portugal?
The deposit depends on your residency status.
- Residents may need around 10–20% of the property price.
- Non-residents typically need 30–40%, as banks finance a smaller percentage of the property value.
What are the typical mortgage rates in Portugal?
Mortgage rates in Portugal are usually linked to the Euribor plus a bank margin known as the spread. Depending on the mortgage type and market conditions, interest rates typically range between Euribor + 0.8% and Euribor + 1.5% for variable-rate mortgages.
How long can a mortgage term be in Portugal?
Mortgage terms can extend up to 40 years, although shorter terms are common. Longer terms reduce monthly payments but increase total interest paid.
Can non-residents apply for a Portuguese mortgage?
Yes, but non-residents may face stricter conditions, such as higher deposits and slightly higher interest rates.
Do I need a Portuguese bank account to get a mortgage?
Yes. A local bank account and Portuguese tax number (NIF) are required to process a mortgage.
How long does it take to get a mortgage in Portugal?
The mortgage approval process usually takes 4 to 8 weeks, depending on the bank and how quickly documents are submitted. The timeline also includes the property valuation and final loan approval.
Can buying property with a mortgage in Portugal help me get residency?
Not directly. Property no longer qualifies for the Golden Visa, but you may still apply for visas such as the D7 or D2.
Securing a mortgage in Portugal can make buying property much more accessible for international buyers. With the right preparation and guidance, the financing process can be straightforward and tailored to your investment or relocation plans.
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