Portuguese Mortgages

As Portugal is becoming an increasingly popular location for foreign property purchasers, it is not surprising that the Portuguese mortgage market is also developing at an impressively fast rate.

Get a Free Quote Portuguese Mortgages -The Basics
As Portugal is becoming an increasingly popular location for foreign property purchasers, it is not surprising that the Portuguese mortgage market is also developing at an impressively fast rate. Not only is the Portuguese mortgage market expanding rapidly, but UK-based lenders are also sufficiently comfortable with the certainty of property in Portugal that they are often prepared to offer financing for a purchase in this country.

The Application Process
Unlike in the UK, mortgage providers¡¦ rates and terms, in Portugal, can vary considerably. Issues such as the individual, their financial background and current status have the largest bearing on the rates available, although the property in question will also have some influence on the terms of the mortgage.

The first step is to arrange a ¡¥pre-qualification¡¦. This allows a borrower to see what types of mortgages are available and the rates at which they will be able to borrow.

Self-certification mortgages are not widely available and proof of income is required by any Portuguese lender. In fact, any lender who does allow a self-certification mortgage will normally offer such high interest rates and costs that it is simply not a viable option for most investors.

As a general rule, the amount of the mortgage is around 80 percent of the value of the property. This figure relates directly to the size of the deposit is payable, allowing the borrower to obtain a mortgage for the total amount that does not form part of the deposit.

Mortgages in Portugal are widely available for between 5 and 25 years although, in certain circumstances, a longer mortgage may be allowable. Again, if a longer mortgage is required, the borrower is more likely to suffer a less favourable interest rate.

The amount that a borrower can obtain as a mortgage will depend on their income. As a guideline, the mortgage payments will only account for up to 30 percent of the borrower¡¦s monthly income. As is rarely the case in many other countries, the potential rental income of the property is taken into account by Portuguese lenders, when calculating the affordability of a mortgage.

Summary
Bullet Point The Portuguese mortgage market offers great flexibility, with a wide range of rates and terms available;
Bullet Point factors such as income and financial history are vital to the rates that are on offer, making excellent records absolutely vital when applying for a local loan;
Bullet Point mortgages are generally available for up to 80 percent of the cost of the property;
Bullet Point the term of the mortgage is usually for between 5 and 25 years, although longer terms are occasionally available, at a higher cost, of course;
Bullet Point rental income is taken into account when calculating the amount of mortgage that can be achieved.

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Discounted Rate

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2.99%

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3%

 

 

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