Mortgage rates in Portugal for foreigners [2024]

Are you looking for a Portuguese mortgage? You'll be happy to know that most banks and lenders offer mortgages to non-residents.

When I was getting a mortgage in Portugal, I soon learned that not all banks are created equal, and they can widely differ in their mortgage rate offerings.

Let's see the mortgage rates in Portugal for non-residents and which banks offer them.

What are the current mortgage rates in Portugal?

The average interest rate for housing in Portugal is 4.578% in March, a slight decrease from the previous month's 4.606%. This marks a continued decline from 4.623% in January 2024.

However, this can vary from 1% to 9% depending on the type of property you buy, its value, and how much deposit you give. 

Don't rush into things and look at all available options. Otherwise, you probably won't get a competitive mortgage and will pay much more for your property.

Chances are, banks and lenders are much different in your country, and navigating this process in Portugal alone isn't the best option. Specialized companies like Homevest can help non-residents secure the best deal even without stepping foot in Portugal.

Variable rates mortgages in Portugal

Once the most popular type of interest rate for mortgages - variable rate or taxa variável in Portuguese - is now lagging behind the mixed rate.

It once represented more than 90% of all mortgages in the country. But this year, it's only around 23%.

In April, it ranged from 0.85% + Euribor 6m in Millennium BCP to 4.05% + Euribor 6m in CGD.

Pros

• a lower rate than the fixed rate
• installments are smaller when Euribor falls

Cons

• you pay different installments every 3, 6, or 12 months
• installments are higher when the Euribor goes up

Fixed rates mortgages in Portugal

Fixed mortgage rates are much less popular in Portugal, yet you can get a mortgage with a fixed rate in any bank or lender.

With the progressive rise in Euribor rates, the difference between the fixed and variable rates in new housing credit contracts has been steadily shrinking in recent months.

As little as a year ago, a mortgage or any loan was much cheaper when coupled with a variable rate. Now, the difference is much smaller.

Pros

• a stable rate for the whole duration of the mortgage
• you know exactly what you'll be paying each month
• no stress if the Euribor goes up

Cons

• a higher rate than the variable rate under the same conditions
• buyer's remorse if Euribor goes down

What are the banks in Portugal that offer mortgages for foreigners?

Portuguese banks are used to foreigners buying property in their country, and they cater to them as much as they can. For that reason, many lenders in Portugal offer mortgages to non-residents.

Let's see what your options are:

• UCI: a top lender with over 30 years of experience, offering fixed, variable, and mixed mortgages up to 3,000,000 EUR, with no need to translate documents
• Novobanco: online mortgages with competitive interest rates and free life insurance
• Santander: competitive mortgages for construction, remodeling, and buying property for non-residents, with a base spread of 1.90%
• Millennium BCP: the second largest bank in the country, has a quick and straightforward process that can be completed online in less than one month
• Bankinter: offers promotional fixed-rate mortgage options that are 100% online
• Caixa Geral de Depositos (CGD): the largest bank in Portugal, providing mortgages for non-residents with terms up to 30 years and up to 90% of the property valuation if you're buying a permanent residence in Portugal
• BPI: suitable for foreigners buying a home in Portugal, with loan amounts from 75,000 to 1,500,000 EUR
• BNI Europa: a digital bank offering low-cost banking products to non-residents, including mortgages
• Crédito Agrícola: offers variable, fixed, and mixed mortgage rates for loan amounts from 75,000 to 2,000,000 EUR
• Abanca Portugal: an international bank with subsidiaries in 11 countries. Lower your spread from 2.50% to 1.00% anytime by getting their other products
• Banco CTT: the nation's postal service bank, catering to non-residents with competitive mortgages

Homevest helps you receive mortgage offers from banks in Portugal directly from abroad

Homevest helps foreigners buy properties in Portugal more easily by supporting them from start to finish until they receive the keys to their new homes.

Partnering with Reorganiza, a recognized digital mortgage broker, Homevest gives customers access to more banks and expert advice from top mortgage and insurance brokers. 

Explore the benefits of Homevest:

• Better interest rates and faster service
• User-friendly platform to centralize your cross-border house-buying experience into one place
• Personalized guidance
• Free service

Frequently asked questions

Here are the most common questions people buying property in Portugal have.

1. What are the mortgage conditions in Portugal?

The regulations and conditions for non-residents are slightly different than those for residents.

However, general rules apply, such as having a reliable source of income and a good credit score. If you can make a larger initial deposit, your chances of getting a desired mortgage are higher.

2. What documents do I need for a mortgage in Portugal?

The documents you need to get a mortgage in Portugal are personal identification documents (Passport or ID, Portuguese Fiscal Number (NIF)), income and financial history documents (credit liabilities, tax return, last three salary slips, last six bank account summaries, letter from employer, proof of savings), and property-related documents (Preliminary Purchase and Sale Contract (CPCV), official deed or land registration of the intended property).

3. How much deposit do you need for a mortgage in Portugal?

You will need to deposit 20% to 50%, depending on different factors. Portuguese citizens buying from abroad may have some exceptions and require a lower deposit.

4. Do you need a Portuguese bank account to buy property in Portugal?

You don't need one, but it's highly recommended. It's also easy to get one, as the process is fairly straightforward.

5. How many years is a mortgage in Portugal?

Mortgages in Portugal typically last 25 years. However, as a non-resident, your repayment term is 5 to 30 years, with some exceptions (Portuguese living abroad, for instance).

In summary

You have the choice of getting a mortgage in Portugal in all three options - fixed, variable, and mixed rates. Variable mortgage rates have been on the decline for the last four months, while fixed rates are rising slightly.

Although some banks and lenders offer lower rates, they may incur higher overall costs.

To get the best deal possible, you need to compare many different lenders before making a decision. For that, you can utilize Homevest. It does all the heavy lifting for you, allowing you to make an informed decision after getting the best deals in a short amount of time.

Sources used and checked on May 2024:

1. Banco de Portugal
2. Instituto Nacional de Estatística
3. Banco de Portugal
4. UCI Mortgage in Portugal for non-residents
5. Novo Banco Mortgages
6. Santander mortgages
7. Millennium BCP Mortgages
8. Bankinter mortgages for non-residents
9. Caixa Geral de Depósitos Mortgages
10. BPI Mortgages
11. Banco BNI
12. Crédito Agrícola Mortgages
13. Abanca
14. Banco CTT

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.