Having decided that you want to buy a house or apartment in Portugal, you might find yourself wondering what the best way to proceed with finding and applying for a suitable mortgage might be. Rest assured, you have arrived at the right place - Homevest is here to explain your options and help you find a mortgage based on your individual situation.
During the past years, the Portuguese property market has seen an increase in demand. This can partially be attributed to cross-border buyers that stood for 11% of property purchases in the country in 2021. The external demand from non-resident buyers has naturally resulted in higher Portuguese property prices, but it is not all bad news.
As a result of the large number of foreigners buying property, Portuguese banks tend to be open to lend funds to buyers from abroad. This is good news for foreigners wishing to find a second flat in Lisbon, or a holiday house on Madeira or the Algarve, but even more so for Portuguese citizens living abroad that wish to buy a home back home.
Even though several lenders are providing mortgages, the fact still remains that understanding bank requirements, eligibility criteria, and mortgage products is a time-consuming task. As a start, we have summarized what to expect when starting the journey of buying property and getting a mortgage in Portugal.
Read on to learn about mortgage terms from abroad or get in touch with our team to find out how to buy property in Portugal.
Almost all foreign income is accepted by some Portuguese lenders, with the exception being applicants living and earning income in countries that face international sanctions.
In general, Portuguese banks are the most favorable mortgage lenders globally when it comes to offering home financing for applicants from abroad. The terms can be summarized as:
Non-residents will almost without exception be offered a principal plus interest loan, meaning that you will need to start the loan repayment in addition to interest payments from day one. Interest-only mortgages are available by some lenders, but these usually only apply for new constructions and are limited to a 2-year timeframe, after which amortization of the principal begins.
Both domestic and foreign buyers can be offered three types of interest rates, however, some banks limit their offering to only encompass one or two of the options for foreign buyers.
If you have come this far and wish to understand your personal mortgage eligibility and mortgage options in Portugal, please leave your information and our team will be glad to help you.
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