Why Everything You Know About MORTGAGES IN PORTUGAL

By using ComparaJá.pt you can access a whole range of mortgage offers in the Portuguese market. Based on your profile, we can present the financial products that the different banks have for mortgage loans and, from those, you can choose the best one for you. Our mortgage calculator for Portugal will allow you estimate the rates that each bank offers. It is of the utmost importance that you answer the questionnaire that appears in the bottom of the page, as it will help us understand which institution has the best offer. We will be able to show you the most important factors regarding your mortgage: from interest rates, to commissions and taxes. We have a team, fluent in English, Spanish, French and Portuguese, that will help you throughout the whole process.

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Mortgage loan in Portugal: what documents do I need to get this loan?

If you are a foreigner willing get a mortgage in Portugal, you may have to present us some documents in order to get the process completed. Our specialized team will advise you for this matter, but please make sure that you have this documentation when you apply for the loan. These are the documents that you need to gather: If you have a Portuguese permanent address:

• ID Card or Citizen Card
• Last Income Tax Return and its Notice of Settlement
• Duplicates of the last three payroll documents
• Employment confirmation letter
• Floor plan of the apartment or house in Portugal that you are planning to buy
• Plan of the building
• Documents about other incoming sources (if needed)
• Bank Statements (in Portugal and Overseas)
• Credit Report

If don´t have a permanent address in Portugal

• ID Card or Citizen Card
• Tax returns
• Employment Contract
• Bank statements of all the bank accounts
• Duplicates of the last three payroll documents
• Credit Report

Which kind of mortgage loans exist in Portugal?

There are essentially three kinds of mortgage loans in Portugal to buy your Portugal Property. Basically you can have:

• Acquisition Loan : this is the most common loan for buying houses in Portugal. This can be used to buy a home for permanent residence or, alternatively, as a second home for vacations or investment.
• Loan to buy land : this is a special kind of mortgage loan that can be used to buy a land in order to build a house afterwards (you can access it in our Comprar Terreno page - in Portuguese).
• Transfer a loan to another bank : this kind of loan, which in Portuguese is called Transferência de Crédito Habitação (the page is in Portuguese), has the purpose of transferring a current loan to another bank, where you may pay less in interest rates.

Loan Calculator and the LTV

Please be aware that a down payment will be required in order to buy a house in Portugal. This will be affected by the Loan-to-Value (LTV), which can range from 60% to 70% in the case of foreign buyers. This means that you would have to be ready to pay between 30% to 40% of the value of the home in Portugal as a down payment. For example, if the house that you are interested in costs about 200.000 €, you may be asked to make a down payment ranging between 60.000 € and 80.000 € so that the bank will provide with a loan for the remaining amount.

What is the FINE and how to read it?

The Ficha de Informação Normalizada Europeia (FINE), is a document where the standardized information regarding each mortgage loan is in Portugal specified. When a bank accepts your process, ComparaJá.pt will send you a document that aggregates all the relevant information. In this document you can find the interest rate, commissions and all the other costs included in the mortgage loan. Usually, the FINE is written in Portuguese, but our team will help you with it..

Fixed vs Variable rate mortgages

When getting a mortgage in Portugal, you will have the possibility to choose between a fixed or variable rate. In the first case, you will have a loan with a rate the does not change for a set period of years. You are then protected from the market fluctuations, but you won't benefit if the rates go down. Another alternative is the variable rate, which is indexed to the Euribor rate and follows its evolution. If the Euribor goes down, you can expect to pay less in your loan repayment. The opposite happens when the Euribor goes up. In our loan calculator we show you the variable rates from the banks that we have partnerships with. Also, if you wish to get a loan, for example, to refurnish your new house you can visit our credit page, which aggregates the best personal loans in Portugal.