Anglo Portuguese Mortgages

Since interest rates are low, financing the purchase of a property through a national bank loan could be an interesting option, especially because since 2010, Portuguese banks have not been lending as much as they are now. Having as goal the finding of advantageous solutions that make the purchase of a house at a time when access to bank credit is strongly limited, we sign partnerships with the main bank institutions so as to offer excellent business opportunities to all our clients.

Mortgage lenders in Portugal have generally been averse to following the negative Euribor rate, with interest rates for prime borrowers hovering between 3.25 percent and 5.25 percent, depending on the specifics of the loan, although lower mortgage rates may be offered in certain situations.

The early redemption penalty for a variable rate acquisition mortgage is 0.50% as per the regulation of the Bank of Portugal. If it is a straight forward residential property purchase then most banks will make an offer, this is however often only 50% of the property purchase price or less, we offer up to 80% for non residents applying for loans in Portugal.

Depending on circumstances, we may or may not be able to offer you the exact loan amount and interest rate requested. The Financial Services Authority does not regulate loans secured on overseas properties. Once the property and mortgage deeds are signed in front of the Portuguese Notary and all the associated fees and taxes have been paid you become the official new owner of the property.

However, the agency expects the growth rate of new bank lending for housing to soften in 2018 and 2019 compared to the past two years," mainly due to expected smoother GDP growth and persistent restriction to the accessibility of first home purchases.

The rate is usually fixed on the day of the mortgage deed signing (may vary depending on lender) and is based on the prevailing SWAP rate for the chosen fixed rate period. As interest rates are very low at present (2019), you should be able to secure a rate of around 1%, this "spread" will be fixed for the full term of the mortgage and it will "track" with the Euribor rate, so will change every 12 months.

Whilst many people will focus just on the pricing for a mortgage facility it is important to remember that there are other factors that need to be looked at. Some banks have a mandatory requirement for life insurance for example which can escalate the costs of a mortgage and require inconvenient medicals so for many non residents they are normally best avoided.

If you already own a property in another country with sufficient equity, you may choose to take out an additional mortgage, or even a new one on that property to finance your purchase in Portugal. This lower amount makes life very difficult for people buying Algarve Property Agents (you could check here) as often the difference between the actual purchase price and the declared purchase price is huge.

Although things can often change quite dramatically over the period of a mortgage, it is worthwhile noting that Interests rates on the European Continent are typically lower than in the UK. The problem is that the low interest rates are starting to attract a lot of buy-to-let investors, who are finding that the UK market has begun to mature.