Mortgages Iberian Properties
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. Like any mortgage application, it can be a very time-consuming and laborious process, so it's crucial that you provide all the most up-to-date documents at once to avoid delaying the process. This is a tricky type of mortgage to commit to as with all the financial uncertainty at present the interest rates could fluctuate quite dramatically.
What is true is that the number of banks that still offer mortgages to non residents have been reduces by about half. The Portuguese banks have struggled for funding in recent years and so are only approving very strong cases. Portugal Realty is a leading Portuguese real estate agent specialising in properties for sale in Portugal.
Our solution: a mortgage of 375.000 € on the property plus a Lombard loan of 100.000 € on their pension pot. In Portugal the vast majority of mortgages are variable rate, however, fixed rates are becoming more popular. Choose from a range of UK mortgages with the on-going support of our mortgage advisers, who'll support you through the process of buying a property.
A notable issue for tax purposes is that non-residents are taxed only on their Portuguese income. Finance is also available to build or renovate a property and three banks Property Management Algarve are currently offering mortgage finance to UK, Delaware or Malta companies to purchase a property, or for the client to purchase a company already owning a property.
The prevailing environment of low-interest rates continues to support compliance with mortgage payments. Property prices in parts of Portugal may be relatively cheap - certainly compared to the UK - but are currently increasing rapidly. If you rent out your property in Portugal, you may offset the interest you pay on a mortgage for the property against the rental income for tax purposes.
Careful due diligence will allow you to gain a good idea of how much you can afford to pay to purchase your Portuguese property and can work the monthly payments. Failure to sort out the financial side of your Portuguese property purchase until the end may also leave you in a bit of a muddle and with a less attractive mortgage deal at a higher borrowing rate.
Following the trend of the Portuguese property market, bank valuations are continuously rising since several months. Also featured is expert advice on buying new build properties, how to furnish your home in Portugal as well as tips to make the most of your rental property.
The vast majority of mortgages offered in Portugal are on a capital plus interest repayment basis. For some lending institutions, this rate is fixed for the entire life of the loan while for some other financial institution it is usually for a certain period during the life of the loan.
This is complicated by the fact that banks lending in Portugal do not always offer the same conditions to clients, even if they have similar profiles. A better option is to use a mortgage broker, who is used to dealing with this type of transaction, knows exactly which banks and branches to ask, and can probably secure you a better rate.
