Buying Property 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.
The interest rate at the time of issue depends upon the credit-worthiness of the borrower. However, during the Age of Excess many tax rates actually were decreased. While some people choose to re-mortgage their property in the UK to unlock enough equity to purchase property in Portugal, approaching a bank in Portugal to get a mortgage is also very viable.
In fact in some cases you can get a better deal from another bank, when buying bank owned properties. The competitive UK mortgage market provides several advantageous Mortgage interest rates in portugal deals on sterling loans. However, many banks don't lend for international properties or restrict their lending to particular types of property or locations.
Primary residence mortgages are for those who will live in their property in Portugal as their main residence and pay their income tax here. If you're looking to buy property in Portugal, find out how much you can borrow, mortgage options for expats, mortgage calculators and costs of getting a mortgage in Portugal.
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.
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.
But it is clear that all sides have been locked in discussions over a weekend in which Left Bloc coordinator Catarina Martins lay down the challenge that it was high time banks that had received ‘thousands of millions' from the Portuguese economy did something in return.
Banco Comercial Portugues operates as a universal bank, providing a broad range of retail, private, corporate and investment banking products and services. Most mortgages in Portugal run for 25 years, but you can get terms up to 30 years. Offer loan comparison services to people in the UK helping them find the cheapest loans available to them based on their own personal circumstances.
Compulsory products are usually a bank account with the bank offering the mortgage and home insurance with that bank's chosen insurer. The SWAP rate is then increased by the interest rate margin (spread) which is also fixed for the life of the mortgage. Although the vast majority of mortgages are variable rate in Portugal, fixed rates are becoming more popular, banks can offer fixed rates for various time frames, for example 2 years, 5 years and even 10 years.
After the fixed rate period, the loan becomes effective with Euribor 6 months. Completion day - the lender will draw up all the necessary cheques and arrange payment of the property and mortgage taxes from these funds. Banks vary in the maximum allowed age of borrowers, which can limit the term a given institution will allow.
