MORTGAGES & CURRENCY EXCHANGE

FINANCING OPTIONS TO MANAGE YOUR PROPERTY INVESTMENT IN PORTUGAL

MORTGAGES IN PORTUGALL

The question most often asked about buying property in Portugal is – can foreigners get a Portuguese mortgage? The simple answer is yes. 

 

Yes, foreigners can get a mortgage in Portugal, and may have advantages for doing so. This however depends on your individual circumstances. Portuguese bank mortgages are also the most common method of real estate financing in Portugal for both residents and non-residents. This makes banks friendly to foreign buyers and doing business, but doesn’t mean there isn’t a rigorous process for approval.

 

This is where we come in and help prepare you for approval or pre-approval depending on your needs. 

PoRTUGUESE MORTGAGE Advantages:

  • Lending bank will conduct property due diligence and valuation
  • Interest rates can start as low as 1.2%
  • Fixed and variable interest rate options
  • Hybrid financing models depending on investment strategy
  • Age qualifications rage from 18 – 60
  • Advanced online and mobile banking technology to access and manage your investment, ideal if investing for rental income
  • 24/365 access to your mortgage account

TYPES OF PORTUGUESE MORTGAGES

Acquisition Mortgage:

  • Used for purchases of permanent residences or second homes for vacations or investment.

Retiree Mortgage:

  • Retirees with regular pension income are also mortgage eligible in Portugal, provided a guarantor is named. An option which can be beneficial for inheritance and tax purposes.
 Business Mortgage:
  • Available when investing in Portuguese property for commercial use. The maximum mortgage is usually 50 percent of the property price or valuation. 

Land Mortgage: 

  • Available for the acquisition of land when associated with a property development project.

Transfer Mortgage:

  • Used for mortgage transfers between banks where the owner can benefit from lower interest rates.

Refurbishment Loans:

    • Available for the purpose of property improvements.  

FIXED & VARIABLE MORTGAGES

Portuguese banks are friendly to property investment structures and can provide buyers with options such as a choice between a fixed or variable rates. Fixed rates provide for a loan with a set rate over a fixed period, protecting you from market fluctuations. Whereas variable rates adjust based on the Euribor fluctuating rates, where you can benefit from lower or risk higher rates over the loan period. 

 

Financing is ultimately based on the individual investors profile, and why we recommend you taking the pre-approval route. Going this route advances the formalities of your purchase and clarifies the investment requirements for you. 

WHEN TO APPLY FOR A PORTUGUESE MORTGAGE?

Once you have decided on a real estate investment in Portugal, regardless of where in the country you intend to purchase your property. 

 

A pre-approval will help clarify costs, requirements and responsibilities you will have as a property investor in Portugal. It will also help assess the timing of your investment and if you are ready to make a purchase, or if financial planning is needed prior to the mortgage application to ensure you’re successful.  

PORTUGUESE PROPERTY PURCHASING COSTS?

Property Acquisition Costs:

  • Property tax (IMT): 2% to 8%
  • Stamp Duty Tax (IMI): 0.8% of purchase price.
  • Notary, registry, and tax office fees for property deeds: Typically under €1200
  • Legal fees: €1500-2000.

Mortgages Costs:

  • Application & Valuation Fees. Typically under €400 each, but can vary by bank.
  • Stamp Duty Tax (IMI) 0.6% of mortgage.

CURRENCY EXCHANGE

Once you’ve decided on a property, or alternatively if you are selling a property, you will need a facility to transfer funds. You can do this through Portuguese banks, but you may also want to consider alternatives to compare and benefit from the best exchange rates. When investing for rental income purposes you will also want a competitive rate option for continuous fund transfers. 

 

A number of currency exchange services are available in Portugal, and based on your investment type we can help you select which will suit your needs best for making isolated payments or ongoing property management transactions. 

 

LET'S GET STARTED!


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