Anglo Portuguese Mortgages
NOVO BANCO has agreements established with several property developers, enabling you to access special terms for loans, spread and fees. The interest rates of a Portuguese variable rate mortgages is linked to either the 3 or 6 month Euribor rate and increased by the margin (spread) that the bank applies. Construction mortgages are for property buyers who wish to build a new house from the ground up or to renovate an existing property.
When you combine the three influencing factors of Government interference on basically dictating who is creditworthy or not, depository institutions packaging unregulated risky subprime bonds, and record low interest rates, speculative fervor will occur and bubbles will be created in a capitalist society.
With interest rates in Portugal as low as 1.75 per cent plus Euribor (which is currently negative, so the effective is rate 1.584 per cent ) or around the 3 per cent mark for fixed rate mortgages, borrowing in Portugal, in comparison to refinancing property in the UK for example, is currently very cheap.
Some banks in Portugal offer a maximum term of 25 years for non-residents and 30 years for residents. You can also arrange a guarantor, which can be beneficial in terms of inheritance tax if they are also a part-owner of the property. There are also some banks that require you to take out life insurance, which can really add on to the costs of a mortgage.
Corporate and Commercial Finance (Anglo Portuguese) Ltd., can arrange mortgages on completed properties, properties under construction, properties being sold off plan, properties requiring stage payments during construction on selected developments, properties already owned.
The banks are currently lending between 60-80% of the valuation price. Banks may charge a non-refundable commitment fee of up to €600 for loan amounts up to €750,000, with higher fees above this level. Plus advice on currency exchange, lawyers, mortgages and the most professional companies that can help you buy your dream property.
Non-performing loans in Portuguese banks have been reduced to 17.2 billion euros last December 2019 from their previous peak, which was 50 billion euros as of June 2016. Fitch expects housing prices in Portugal to register moderate increases in 2018 and 2019, around 5% per year.
With an Interest Only mortgage, at the end of the lending term, the borrower still owes the same sum as was initially borrowed and so homeowners are strongly advised to make adequate provision to ensure they will be able to repay the outstanding balance at the end of the loan term.
Financial institutions have several duties to inform, including, on one hand, to publicize and advertise on their websites and through the regular contacts with clients, the measures provided for in this Decree-Law (including the terms and Overseas property for sale deadlines to adhere to the moratorium), and on the other hand, to provide full knowledge of all measures provided for in this Decree-Law prior to the formalisation of any credit agreement whenever the client is a beneficiary entity.
If you need to secure a mortgage in order finance a property in Portugal, it would be wise to start arranging your Portuguese mortgage almost before you do anything else. We pride ourselves in offering rare to find adverse credit mortgages in Portugal where debts and poor credit ratings are not always taken into account, these are getting rarer and rarer as time goes on make your enquiry sooner rather than later.
It is the interest rate that banks in the Euro Zone use to lend to each other, and is derived from the base rate set by the ECB. This started in the US with the selling of 'sub-prime mortgages' to less well-off buyers, who were tempted by rising house prices and attractive interest rates (sub-prime means more risky).
