How to choose the right Portuguese mortgage: a case study

Choosing the best mortgage can take time and effort, especially when you’re a non-resident. Portugal has different regulations, and lender requirements vary from those in your home country. What works for others may not work for you. 

In this case study, we will share how Suranga R., a UK citizen, bought a property in Portugal with a mortgage that suited his profile.

The challenge: buying a property in Portugal from the UK

“We went for a holiday in Portugal and fell in love with everything - weather, food, and especially people. Add to the list that the property prices are more affordable than in the UK”, says Suranga. 

Suranga contacted us at the beginning of his property journey. He decided to buy a property with a mortgage, so he reached out to better understand the mortgage process for a UK citizen before beginning his search in Leiria. 

Is it hard to get a mortgage in Portugal from the UK?

Most UK citizens with a good credit score can successfully apply for a mortgage in Portugal. 

There are no specific restrictions for non-EU residents, and the process requires meeting similar criteria as in the UK:

• A full-time job with a secure income increases your approval chances
• A clear declaration of financial dependents helps gauge affordability
• A stable income track record is essential if you're self-employed

The number of foreigners accessing mortgages in Portugal has increased, with British citizens now among the top three. The UK expat community in Portugal is the second-largest, totaling over 46,000 residents.

This means many people like you have successfully navigated this process, just like Suranga did.

“We scheduled property viewing appointments and visited Portugal to see the selected properties we found on estate agent’s sites. The property we found ticked most of our dream home requirements, so we felt that was it”, adds Suranga. 

The next step was to find the right mortgage for his profile.

The solution: a digitalized mortgage experience directly from abroad 

Homevest simplifies the mortgage process for international buyers in Portugal by offering a comprehensive, user-friendly digital platform. 

The Homevest platform assists applicants in sourcing the right documents required for bank review. It makes sure all necessary paperwork is easy to find and access in one place.

By partnering with Reorganiza, a digital mortgage broker renowned in the Portuguese market, Homevest ensures that applicants reach top banks for non-resident buyers and receive offers within a week of choosing their preferred option.

After explaining the mortgage process and setting expectations, we helped Suranga build his mortgage file, which was then sent to 8 banks in Portugal.

“We are familiar with each bank's offerings, allowing us to easily adapt them to each client's needs and financial situation. Our negotiations on interest rates, insurance, and other financial products often secure more competitive terms than clients might achieve on their own,” says Reorganiza. 

The outcome: competitive offer from Novobanco, 75% LTV

Reorganiza consistently presents the optimal banking solutions for client consideration, adhering to strict criteria to align with their needs and financial goals. “By outlining the pros and cons of each option, we empower our clients to make informed decisions”, says the digital mortgage broker. 

Finally, Suranga accepted the offer from Novobanco and was pre-approved for a 75% LTV.

The customer’s experience with the mortgage process in Portugal was straightforward. 

“It was really simple. We are so happy, and dealing with all the documents was easy. There were many unknown things compared to the UK, but we had good guidelines and help throughout the process. Because of that, the journey was simple and easy," mentions Suranga.

According to Banco de Portugal, more than 10% of credit for purchasing a house was granted to foreigners last year, totaling 1.2 billion euros. But how do you choose the right mortgage for you? It’s essential to have the right support by your side.

Discover everything you need to know about applying for a mortgage in Portugal from the UK, including key requirements and post-Brexit changes, to become a strong candidate.

The next step is to take a closer look at your mortgage options with the help of some local knowledge. Many non-residents use the Homevest service to connect with expert brokers and secure the most favorable rates.

Sources used in July 2024:

1. More foreigners taking out Portuguese mortgages

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.