Financing · Mortgage Lending

Mortgage Lending in Portugal — A Practical Guide for Buyers

6 July 2026 · Rafaella Galardo

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Buying a home in Portugal involves, in the vast majority of cases, taking out a mortgage. Understanding how the process works, what costs are involved and what the banks assess is essential to making an informed decision — whether you are a national or a foreign buyer.

1. How mortgage lending works

The bank lends a percentage of the value of the property — typically up to 90% for residents and up to 80% for non-residents — and the buyer repays it in monthly instalments that include principal and interest. The property is mortgaged as security for the loan.

The amount financed depends on the valuation carried out by the bank (which may differ from the purchase price) and on the buyer's financial profile. The difference between the price and the amount financed — the so-called down payment — must be covered from the buyer's own funds.

2. Types of interest rate

There are three main options:

• Variable rate — indexed to the Euribor (3, 6 or 12 months), which is revised periodically. The instalment can rise or fall depending on how the index moves.
• Fixed rate — remains constant for a defined period or for the whole term of the contract. It offers predictability, but the initial spread is typically higher.
• Mixed rate — fixed in the first years (usually 2 to 10), variable thereafter. It combines initial security with later flexibility.

The choice depends on the buyer's risk profile, the term of the loan and the market conditions at the time of taking it out.

3. What the banks assess

Banking institutions essentially analyse:

• Debt-to-income ratio — the percentage of net monthly income allocated to loan instalments. According to the Macroprudential Recommendation of the Banco de Portugal, it should not exceed 50% of the household's net income, although most banks prefer figures below 35%.
• Professional stability — type of contract, length of service and sector of activity.
• Credit history — checked through the liabilities report of the Central Credit Register of the Banco de Portugal.
• Age of the borrower(s) — this influences the maximum term of the loan (as a rule, the contract cannot extend beyond the age of 75 of the oldest borrower).
• Valuation of the property — this determines the maximum amount the bank is willing to finance.

4. Costs associated with the purchase

In addition to the down payment (the difference between the price and the amount financed), the buyer should budget for:

• IMT — the Municipal Tax on Onerous Transfers of Real Estate, paid before the deed, with progressive rates depending on the value and the purpose of the property.
• Stamp Duty — on the purchase (0.8% of the value) and on the loan (0.6% of the amount financed for contracts with a term of more than 5 years).
• Bank fees — opening the file, valuing the property and formalising the loan.
• Mandatory insurance — life insurance associated with the loan and multi-risk property insurance.
• Notary and registration expenses — the public deed or authenticated private document, and registration of the acquisition and the mortgage at the land registry.

For a detailed estimate of these costs with the figures in force, see our complete guide to purchase costs in 2026.

5. The role of the credit intermediary

The credit intermediary is an individual or company authorised and registered with the Banco de Portugal, under Decreto-Lei n.º 81-C/2017. It acts as a bridge between the buyer and the banks: it analyses the financial profile, compares proposals from multiple institutions, negotiates conditions and follows the whole process through to the deed.

Professional certification is mandatory and is obtained through specific training delivered by training bodies certified by the Banco de Portugal. The registration and authorisation of each intermediary can be confirmed on the official list of the Banco de Portugal.

In the vast majority of cases, the intermediation service is free for the buyer — the intermediary's remuneration is borne by the banking institution that grants the financing.

→ Consult the list of credit intermediaries registered with the Banco de Portugal

6. Foreign buyers

Non-residents can access mortgage lending in Portugal, although typically on different terms:

• Financing of up to 70–80% of the valuation (vs. 90% for residents).
• A Portuguese tax number (NIF) is required — mandatory for any real estate transaction.
• For residents outside the EU/EEA, a tax representative in Portugal may be required.
• Opening a Portuguese bank account — mandatory for the loan to be granted and for the instalments to be paid.
• Proof of income in the country of origin may require certified translation.

The risk assessment for non-residents tends to be more demanding, but the process is feasible and increasingly common. Being supported by a credit intermediary experienced with international clients can considerably simplify the process.

7. State guarantee for young people up to 35

Since September 2024 and until 31 December 2026, young people up to the age of 35 who meet certain requirements can benefit from a State guarantee that allows financing of up to 100% of the value of the property for a first own and permanent home. The requirements include:

• Being between 18 and 35 years old (in a couple, both members must meet this requirement).
• Tax domicile in Portugal.
• Annual income up to the 8th IRS bracket.
• Property value up to €450,000.
• The property must be intended as a first own and permanent home.

The State acts as guarantor, covering up to 15% of the value of the transaction, for a maximum period of 10 years. Beneficiaries may also be exempt from IMT and Stamp Duty.

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