Home Mortgages In Portugal

Mortgage interest rates in the Eurozone are on the rise, putting Britons who have borrowed to buy holiday homes in Spain under increasing financial pressure. As a foreigner or non-resident, if you are looking to buy property in Portugal and want to use a mortgage to finance the purchase, now is a good time because the banks are lending again thanks to the economic recovery and the solid real estate market.

For the last few years there's been a noticeable increase in the level of client's looking at local financing, mostly due to the excellent rates on offer, often under 1%, as well as clients from the UK looking to hedge their bets on the exchange rate fluctuations.

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 Vila sol villas for sale 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.

This means they will take your total borrowing commitments including any existing home mortgage, personal loans etc plus the new mortgage payment and calculate the total as a percentage of your Net monthly income. Notaries and Registration fees are fixed although they could vary according to the type, number or complexity of acts to be done or registered, whereas Purchase Transfer Tax (IMT) and Stamp Duty are based on the declared price of the property.

Laid out in its simplest terms, they'll use an outgoings-to-income calculation to figure this out, which means your total monthly income, subtracted the monthly outgoings (including the new mortgage payment). They have access to international lenders who offer funding for home purchase loans and re-mortgage financing.

Once you've found a property in the Algarve to buy then the mortgage approval process can be completed fairly quickly. There's no such thing as a ‘buy-to-let mortgage' in Portugal, banks do not differentiate their offering. Fiscal residents in Portugal (i.e., those who pay tax there) may be able to borrow up to 85-90% of the sale price in some cases.

Cold and bleak translates into: GDP steady or falling (recession); high interest rates on public and private debt; inflation rising; shortage of credit for businesses and private mortgages; tax rates going up; rising unemployment; stock market prices falling ('bear' market).

Acquisition Loan : this is the most common loan for buying houses in Portugal. It is used for both variable and fixed rate mortgages in Portugal, 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.

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. If you wish to receive any specific information about mortgages in Portugal or would like to receive a proposal, please do not hesitate to contact us and we'll be glad to try and help.

For a Portuguese mortgage, the minimum deposit is usually at least 30% of the purchase price for non-residents, because financing institutions provide only between 60% to 70% credit of the valuation price. Mortgage loans are secured loans used for real estate financing purposes (for example, purchase of a new or existing property, construction of an own property, property renovation) without paying the entire value up front.