Portuguese mortgages and how they work
All Portuguese mortgages are full status and
proof of income and outgoings will be required.
Portuguese mortgages can be arranged for acquisition,
renovation and construction and the mortgage is
secured on the property in Portugal.
A deposit of 20% of the purchase price is required and you will also
be liable for solicitor's fees. Euro mortgages are available, and the
minimum loan amount you can borrow depends on the lender you use. Mortgages
are generally Repayment loans and can be taken over a 5-25 year term,
although some mortgage lenders will be happy to provide Interest Only
loans. All mortgages should be fully repaid by the age of 75 and life
cover is required. The mortgage is secured on the property in Portugal.
Portuguese lenders assess eligibility for a loan on the applicant's ability
to service the loan and not potential rental income from the property.
The general guideline is as follows: of an applicant's net income 35%
should cover existing outgoings and the monthly repayment on the Portuguese
loan. If you are self-employed income is assessed as the average of the
last three years' net income. Rental and investment income will also be
considered. If employed a lender will base your income on your payslips
and the amount that is credited to your account monthly. Outgoings considered
are liabilities such as mortgage/rent in the UK, personal loans &
For example - If you have a net monthly income of £2000 with a
UK mortgage of £500 and no other outgoings. Taking into account
35% of the income, that is £700, a borrowing with a monthly repayment
of £200 could be considered.