Mortgages Portugal Property Hub

Obtaining a mortgage in Portugal in Euros will probably give you the best interest rate for your mortgage, however it is often easier to raise the money in the UK (or your home country) and then purchase the Portuguese property outright. As a general rule, most mortgage lenders charge between €150 to 0.50 per cent of the loan amount plus IVA (the equivalent of VAT in Portugal) for the arrangement fee. Another benefit is that should you decide to let your property in short- or long-term contracts, your rental income in euros may offset or cover the mortgage payments in euros from your Portuguese bank, which naturally hedge any currency risk.

Looking forward, we estimate Bank Lending Rate in Portugal to stand at 2.31 in 12 months time. Buildings insurance is mandatory when buying a property with a mortgage in Portugal. Mortgages for property in Portugal are normally available for up to 75 percent of the value of the bank valuation (loan to value LTV).

Hinting last week at this coming down the line, Público stressed that the nation's banks expect ‘something in return' from the government, in terms of a guarantee that they will not be penalised" when it comes to solidity. If you are serious about buying a property in Portugal then you should start arranging your Portugese mortgage almost before you do anything else.

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.

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.

One of the key problems is that the financial institutions will not release what their real position is. The same thing is true of situations here in the US. Banks are allowed to carry items on their balance sheets that do NOT have to have the true value posted.

Mortgage rates in Portugal have been dropping consistently since the first quarter of 2014, when they averaged 3.37%, according to Statista The most recent data, based on the third quarter of 2018, shows an average Portuguese mortgage rate of just 1.33%.

The banks typically offer loan terms of up to 50 years for residents and 30 years for non-residents. The fixed-rate mortgage basically allows borrowers to pay a constant expat mortgage in Portugal - www.google.co.uk - rate for a certain period. As with mortgages in the UK, the type of mortgage you are eligible for will depend on your situation and how you intend to use the property.

If you require financing for a property purchase in Portugal or if you're interested in comparing your current loan conditions, speak to us as we offer a free and independent finance solution service that is determined to find you the best mortgage conditions on the market.