Portuguese Mortgages for Foreigners: What You Need to Qualify
Portugal continues to attract foreign buyers thanks to its mild climate, stunning coastline, and relatively affordable property market. If you're a non-resident looking to purchase a home here, the good news is: yes, you can get a mortgage in Portugal. However, the process differs slightly from what residents experience. Here’s what you need to know.
1. Can Foreigners Get a Mortgage in Portugal?
Yes, both EU and non-EU citizens can apply for a mortgage with Portuguese banks. Most banks offer home loans to foreigners under similar conditions as locals, though the process may require more documentation and a slightly higher down payment.
2. Main Requirements for Foreign Buyers
Essential Documents:
To apply, you’ll typically need to provide:
Valid passport or EU identity card
Portuguese tax number (NIF – Número de Identificação Fiscal)
Proof of income (recent payslips, tax returns)
Recent bank statements (3 to 6 months)
Credit report from your home country
Proof of address (utility bill or bank statement)
Down Payment:
Most banks finance up to 70% of the property's value for non-residents. This means you'll need to cover at least 30% with your own funds, plus additional costs like taxes and notary fees.
Debt-to-Income Ratio:
Banks typically require that your monthly financial commitments, including the new mortgage, do not exceed 30% to 35% of your monthly income.
3. Additional Considerations
Interest Rates:
Mortgages in Portugal usually come with either:
Variable rates (indexed to Euribor + spread)
Fixed rates (less common, but more predictable)
Most foreign buyers choose variable-rate mortgages, but this depends on your risk tolerance and long-term plans.
Mortgage Terms:
Loan terms can range from 5 to 30 years, depending on your age and financial profile.
The mortgage typically must be repaid before you reach age 75.
Required Valuation:
The bank will conduct an official property appraisal (avaliação bancária) to determine its market value. The loan-to-value (LTV) ratio is based on this amount, not the purchase price.
4. Fees & Costs
In addition to your down payment, budget for:
IMT (Property Transfer Tax): Between 1% and 8% depending on property price
Stamp Duty (Imposto de Selo): 0.8% of purchase price, and 0.6% on the mortgage value
Bank arrangement fees: Usually between 0.5% and 1% of the mortgage amount
5. Tips for a Smooth Application
Work with a mortgage broker experienced in working with international buyers
Consider pre-approval before searching for a property
Open a Portuguese bank account
Make sure all documents are translated and certified, if not in Portuguese
6. Start with a NIF and Financial Planning
Before anything else, get your Portuguese tax number (NIF), you’ll need it to open a bank account, sign a promissory contract, and apply for financing.
Getting a mortgage in Portugal as a foreigner is entirely achievable with the right preparation. By understanding the local requirements, organizing your documentation, and securing a trusted financial partner, you can move forward with confidence in your Portuguese property journey.
At ICON Property, we specialise in guiding international clients through every step of the buying process. Whether you're looking for a luxury villa in the Algarve or a stylish apartment by the sea, our team ensures you feel supported, informed, and confident at every stage.