Opting for a more energy-efficient home can save money on your mortgage
Opting for a more energy-efficient home can save money on your mortgage

What are the best mortgages in Portugal for UK residents?

Ensure you have your P60 form ready when applying for a mortgage, regardless of the bank you choose. This essential tax document, which details your income, taxes, and contributions from the previous year, is crucial for evaluating loan offers. Explore the best mortgages in Portugal for UK buyers and see how Homevest can help you compare the available options.

Delia Mihuț
Written by: Delia Mihuț
Published at 2024-04-23
Last updated on 2024-05-23
Readtime 4 minutes

Ever wish you could escape the British weather and lie back and relax in the sunshine?

Mortgages in Portugal for UK residents are more accessible than you might think, so we’ll introduce you to your options. 

Keep reading our guide on the best mortgage in Portugal for UK citizens, and you could be there before you know it! 

Millennium BCP

First stop on our search for the best mortgage in Portugal for UK citizens is Millennium BCP. They provide a highly flexible option for mortgage applicants living and earning income outside the EU.

Key features
  • lower interest when your salary is deposited into a Millennium BCP account 
  • the ability to finalize your new mortgage in less than 1 month 
  • no requirement to submit loan or mortgage contracts in place in the UK 

Millennium BCP offers a high degree of flexibility when signing the deed. During the working week, signings can be carried out up until 10 pm. However, to take advantage of these features, you will need to have both home and life insurance in place.

Tip: Millennium BCP prefers applicants with in-demand, highly skilled occupations, so they will prioritize legal professionals, medical practitioners, and engineers. 

Novobanco

Novobanco positions itself as a highly accessible lender focused on the ease of use of its services. Intuitive calculators, simple financial options, and even the option to help British nationals secure a Portuguese bank account make Novobanco attractive. 

Key features
  • free life insurance is offered with all Novobanco mortgages 
  • signing up for a Golden Key bank account for €15 per month provides fully bilingual phone and email support 

Tip: Try Homevest to find offers for the best mortgage in Portugal that match your specific profile as a UK citizen.

This digital service offers a user-friendly platform where you can centralize your cross-border house-buying experience into one convenient place.  Your documents are reviewed by top mortgage brokers and forwarded to eligible banks. 

Santander

Santander is a subsidiary of the well-known Spanish banking group and another lender offering Portuguese mortgages to UK residents. 

Key features
  • interest rates in the range of 4.9-6.8% APR with the option to fix the spread at 0.5% for the first 3 years 
  • you can borrow up to €1,000,000 to cover up to 80% of the property price 
  • you can reduce the interest rate by up to 0.80% by taking out contracted products 

They will cover the cost of the dossier commission, evaluation commission, and associated taxes. This will save you €280. 

Tip: Budgeting for property, contents, and life insurance will help you assess the overall affordability of your new life. 

UCI

This highly flexible lender is particularly popular with those looking at financing new builds and fixer-uppers. It is also a good option for self-employed applicants whose income can fluctuate. 

Key features
  • monthly mortgage payments must not exceed 40% of your income 
  • new builds with energy ratings of A or higher qualify for a 0.1% interest reduction 
  • rates are offered in the range of 5.1-6.1% APR from anywhere from 7-30 years 

UCI charges a total of approximately €1,100 for all the fees associated with buying a property. 

Tip: Searching for mortgage providers who waive administrative and valuation fees can help you streamline your budgeting. 

Bankinter Portugal

Bankinter is a Spanish bank subsidiary that offers a wide selection of non-resident mortgages in Portugal, accessible to UK residents. Their major selling point is the ability to fix the size of your mortgage repayments for up to 30 years. 

Here are some examples from their calculator:

  • 2.50% for 1 year
  • 3.20% for 5 years
  • 3.60% for 10 years
  • 3.45% for 25 years
  • 3.45% for 30 years

Note that these figures do not include the spread, which can fluctuate on top of the fixed portion of the interest. The spread will be a minimum value of 1.25% for non-residents. These offers are also only available if this is your first mortgage in the country.  

They also offer a new Green Mortgage that will reduce your fixed rate by 0.1% if your Energy Efficiency Certificate is A-rated or above. 

Tip: Opting for a more energy-efficient home can reduce ongoing maintenance costs and utilities, as well as saving you money on your mortgage. 

Comparison of the 5 Portuguese banks that offer mortgages for UK buyers

Bank
Interest Rate
Loan amount range
Bank
Millennium BCP
Interest Rate
0.85% + Euribor 6m
Loan amount range
Up to 80% of purchase price
Bank
Novo Banco
Interest Rate
1.1% + Euribor 6m
Loan amount range
Up to 80% of purchase price
Bank
Santander
Interest Rate
2.5% + Euribor 12m
Loan amount range
Up to 80% of purchase  price
Bank
UCI
Interest Rate
1,64% + Euribor 6m
Loan amount range
Up to 70% of purchase price
Bank
Bankinter Portugal
Interest Rate
1.25% + Euribor 12m
Loan amount range
Up to 80% of purchase price

Cost comparison was made on April 15, 2024

The maximum loan amount for a UK resident from the above lenders is €3,000,000.

In summary

UK residents have the option to select fixed, mixed, or variable rates for a Portuguese mortgage, for periods of up to 30 years. Luckily, there are solutions to benefit from that streamline your mortgage application directly from abroad.

Discover a mortgage in Portugal from the UK that suits your needs and apply on the Homevest platform to gain access to top banks for non-residents, all in one place. Upload your documents just once and receive multiple offers. It’s fast, easy, and free. 

 

Frequently asked questions

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

You will need to save up to 20-50% of the value of the home you want to buy. 

2. What is the debt-to-income ratio for a mortgage in Portugal?

Your household debt (including your new mortgage) cannot exceed 35% of your net monthly income.

3. What is the maximum mortgage age in Portugal?

You cannot be older than 75 on the day your mortgage ends. 

 

Sources used and checked in April 2024:

  1. Portuguese mortgage interest rate for non-residents
  2. Millennium BCP mortgage for non-residents
  3. Novobanco mortgage for non-residents
  4. Novobanco Golden Key Account
  5. UCI mortgage for non-residents
  6. Bankinter mortgage for non-residents
  7. Santander mortgage for non-residents
 

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.

Delia Mihuț
Delia Mihuț
In which part of Portugal are you thinking of buying a property? Share your experience and leave a comment below.
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