Portugal Bank Lending Rate
Quinta Finance has established itself as the leading mortgage brokerage service in Portugal that offers professional mortgage advice for non-resident property buyers; our aim is to help you throughout every step of the process until completion. In each country the local lenders are increasingly catering for UK buyers and some UK based banks will also offer mortgages on overseas property. With the property market heading for the house, the households' bank rating for home loans rose in July for the fourth consecutive month to EUR 1,117 per square meter plus EUR 5 compared to the previous month.
If you own a plot of land in Portugal or wish to renovate your existing property, we will assist you in obtaining the best possible conditions of a construction loan. Most Portuguese lenders offer different types of mortgage repayment options on either a fixed or a variable interest rate.
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.
The mortgage market in Portugal is quite traditional in the sense that having the right contacts is crucial if you want to get the best deals. These new rules may restrict the more enthusiastic practices of many banks before the recession, those that are still in business anyway, but fail to represent a tightening of consumer credit as the State relies on a healthy housing market.
The steeper price of land plots and the superior quality of the properties in Portugal has led to the property costs becoming higher than that in Spain. In April 2016 Bankinter closed the purchase of Barclays' retail business in Portugal thus forming Bankinter, SA - Sucursal em Portugal.
Most overseas countries look at the Debt to Income ratio i.e. the percentage of your total net monthly income that is used to make debt repayments such as domestic mortgages, personal loans, car payments, credit cards AND the mortgage you are now applying for.
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.
Tax Angels is an independent and experienced financial consultancy company that provides free mortgage services to non-residents in Portugal. Openwork Limited offers insurance and investment advice on products from a limited number of product providers and advice on mortgages representative of the whole of the market.
Acquisition Loan : this is the most common loan for buying houses in Portugal. It is used for both variable and fixed rate Villas For Sale in the Algarve, though the vast majority of mortgages in Portugal are variable rate. This is a great option if you are able to get a low interest rate at the time of signing the mortgage deal.
Portuguese banks have strict affordability criteria which means that, including the mortgage you are applying for, the total of all debt service payments you have to make (inculding your UK mortgage and any other personal loans you have in the UK or elsewhere) cannot be more than 35% of your net income.
Unless significantly and recklessly over valued (always likely in Portugal!) we can be reassured that at least the Portuguese Bank lending its savers money has anchored it on something. No financial information is stored after the client accepts the Bank offer.
