With enchanting cities and a spectacular Atlantic coastline, Portugal is a hugely popular choice for UK expats. The country’s former maritime empire has given rise to a warm and welcoming culture. To add to its appeal, Portugal’s property market is relatively inexpensive by European standards.
If you’re considering buying a property in Portugal – and who can blame you? There are a few factors to consider. In general, the process is quite similar to buying a property in the UK, but there are nuances to getting a mortgage in Portugal as a foreigner. In this guide, we’ll cover:
- How to find a mortgage for a Portuguese property, and what the eligibility requirements are
- The process for applying for a Portuguese mortgage and how long it takes
- The costs, fees and taxes applicable to Portuguese mortgages for UK residents
- The types of mortgages available to foreigners in Portugal
- Tips and tricks for getting the right mortgage for you
In the rest of this guide, we’ll take an in-depth look at your mortgage options in Portugal, covering everything you need to know about Portuguese mortgages for UK buyers in easy, jargon-free steps.
Can foreigners get a mortgage in Portugal?
The short answer is yes, buying property in Portugal with a mortgage is common and foreigners face no legal barriers to property ownership. Banks are generally open to lending to buyers from overseas.
The only issue you may face is that lenders generally require a larger deposit from foreigners than they might from Portuguese citizens.
Why get a mortgage in Portugal? Benefits & advantages
If you can’t afford to buy a property in Portugal outright, you’ll have to get a mortgage. But there are also benefits to financing your Portuguese dream with a loan.
Advantages of financing property in Portugal
Most importantly, mortgage loans free up capital for other investments or for renovating a property in need of modernisation. Portuguese lenders offer attractive mortgage rates, making money go further. Banks also carry out thorough legal checks on properties that are subject to a mortgage application, alongside comprehensive property valuations.
Finally, if you purchase a property with a mortgage in Portugal you’re free to rent it out, potentially creating a valuable source of income.
Foreign buyer eligibility: Do you qualify for a mortgage in Portugal?
The good news is that it’s almost as easy for eligible foreigners to get mortgages in Portugal as it is for Portuguese citizens, though banks may not lend you as much. It’s especially straightforward for residents in Portugal, but banks will also lend to those purchasing holiday homes and investment properties.
Minimum requirements & documentation
Eligibility requirements for a Portuguese mortgage are similar to those for a UK equivalent. Most importantly, you’ll need to show that you can provide a deposit and meet monthly repayments. For non-residents, deposits can be as much as 30% to 40% of the purchase price.
Lenders have their own rules, but you’re also likely to need to show that monthly mortgage repayments take up no more than 30%-35% of your income.
Get your paperwork in order before applying for a mortgage and the process is likely to be simpler and quicker. You’ll need:
- ID – usually your passport
- Proof of address
- Proof of income
- Proof of deposit
- Three months’ of bank statements
- Details of the property you want to buy
- A NIF – a Portuguese tax identification number.1 You’ll need this to open a bank account and apply for a mortgage
How much can you borrow? The loan-to-value (ltv) ratio explained
Loan-to-value (LTV) is the amount of a property’s value that can be borrowed from a mortgage lender. While Portuguese banks are typically prepared to lend residents up to 90% of the value of the property they want to purchase, that figure drops to 65% or 70% for non-residents. In other words, if you borrow 70% of the value of the property, you’ll need to pay a 30% deposit, as a non-resident, to make up the shortfall.
Types of mortgages in Portugal
The mortgage market in Portugal will be familiar to anyone who has bought a house in the UK. The two main types of mortgages available in Portugal are fixed-rate mortgages and variable-rate mortgages.
Fixed-rate mortgages
The Portuguese mortgage market offers a wide range of fixed-rate deals, which have a fixed interest rate for a set period of time and offer certainty over the value of monthly repayments. On the downside, early repayment penalties can be steep.
Variable rate mortgages
Variable rate mortgages are available that offer interest rates linked to the Euribor (Euro Interbank Offered Rate), which means your monthly payments can go up and down. Early repayment penalties tend to be less severe.
How to apply for a mortgage in Portugal: step-by-step process
Buying a property in Portugal – as elsewhere – is a case of following a step-by-step process. Planning for each step in advance can make the process faster and more seamless.
- Get pre-approval from a lender
You can go directly to a lender, but many expats prefer to work through a mortgage broker. After an initial consultation and a consideration of basic details, you’ll get pre-approval for a mortgage, helping you set a budget and negotiate with sellers.
- Gather and submit documents
Having relevant documents (listed earlier) to hand will speed up the mortgage process. Submit them as part of the formal mortgage application.
- Formal mortgage offer
All being well, you’ll then receive a formal mortgage offer.
- Get a property valuation
It’s quite common in Portugal to have a property valued before you put in an offer, so the survey can be used as a basis to negotiate on price if any issues are found.
- Get a Contrato de Promessa de Compra e Venda (CPCV)
When you find a property you like at a price that’s right, a CPCV can be highly useful. More on this later.
- Offer accepted
When your offer is accepted, deeds will be signed by a notary, money will be transferred and the property will be yours! The process can take between two and six months on average.
Mortgage costs & fees: what to budget for
Getting a mortgage in Portugal as a foreigner involves a number of extra fees and costs, which you will need to budget for. These are the main ones:
IMT
The IMT is a property transfer tax charged by the municipality in which the property sits. It’s usually based on purchase price and differs by property type and location, but is typically between 1% and 7.5% of the property’s value.2
Stamp duty
Stamp duty is charged at a standard 0.8% of the property value and 0.6% on the loan amount.
Bank fees
Lenders charge administrative fees, which might typically amount to around 1% of the mortgage sum.
Valuation fees
You’ll have to pay for the property valuation. Amounts differ, but are typically between €500 and €800.
Registration fees
Registration fees can be in the range €250 to €700.
Estate agent fees are usually paid by the seller.
Is property insurance mandatory for a mortgage in Portugal?
Yes, buildings insurance is usually required to secure a mortgage offer in Portugal. That will include protection against fire and flood, and costs will be based on the estimated reconstruction value of the property. In addition, life insurance is always recommended and often required. Contents insurance is not mandatory.
What is the promissory agreement (CPCV)?
The Contrato de Promessa de Compra e Venda (CPCV) is a significant step in the Portuguese property buying process. Signing it effectively commits both buyer and seller to the transaction by imposing financial penalties for backing out. The deposit is paid by the buyer as part of the CPCV process. If the buyer then defaults on the transaction, they lose the deposit. If the seller defaults, they have to return the deposit doubled. The CPCV isn’t mandatory and adds an extra step to the process, but it does mean that the sale is much more likely to complete.
Post-mortgage approval: what’s next?
When your mortgage is approved, you can complete the purchase of your Portuguese home. As in the UK, you can remortgage at some point in the future if you wish, transferring your loan to another lender. You might typically do this to secure a better mortgage rate or switch from one type of mortgage to another.
Be aware, though, that your current lender may charge early repayment penalties, and a new lender may charge fees of its own. Make sure to factor all these costs into your decision to transfer your mortgage.
Best time to apply for a mortgage in Portugal
If you’ve made the decision to buy a property in Portugal the best time to apply for a mortgage is as soon as possible. Having a mortgage in place shows that you are a serious buyer, potentially helping in negotiations with sellers. It also streamlines your property search by showing exactly what you can afford.
Comparing mortgage offers: how to find the best deal
There are over 15 banks in Portugal that provide mortgage loans, including BBVA, Santander and Banco Best. They all offer different mortgage products, rates and lending criteria, so it’s worth shopping around (use one of the comparison sites mentioned earlier). A mortgage broker can simplify the search based on your personal circumstances and help you overcome any language barriers. Many brokers in Portugal are experienced at dealing with buyers from the UK.
1 Portuguese government – getting a NIF
2 Portuguese Trade and Investment Agency – Transfer tax (IMT)
Sources last checked 21/07/2025
