PORTUGAL MORTGAGE
Your Mortgage Broker in Portugal
We offer the best mortgage solutions to foreigners, residents, and non-residents.
Knowpedia (Registration 4639 Bank of Portugal)
Our Mortgage Solutions
PROPERTY PURCHASE
If you are thinking about purchasing property in Portugal, we assist you in the process of financing the deal, by working with financial institutions that provide acquisition mortgages tailored for private individuals.
CONSTRUCTION & REHAB
If you currently possess land within Portugal or hold the aspiration to enhance your existing property, we are committed to facilitating the attainment of optimal terms for your construction loan.
MORTGAGE TRANSFERENCE
If you currently hold a mortgage, there is the option to transfer it to an alternative financial institution that presents more favorable terms. Our service provides you with the information needed to make an informed decision.
REFINANCING
If you already own property in Portugal free of any foreseeable liabilities and you want to finance construction & rehabilitation projects, there is an option of financing with a lien-free property mortgage.
BUSINESS MODEL
The mortgage service is free of charge for our clients. We are remunerated by the financial institutions.
Our service is free
How does it work?
We help our clients in the mortgage application process, taking care of everything, whether physically in Portugal or not:
1. Assessment
Our process commences with a thorough assessment of your individual requirements and present financial situation. Subsequently, we devise a strategic plan tailored to your needs.
2. Simulation
We gather essential data and establish communication with multiple reputable banks. These institutions will then provide their mortgage conditions for your consideration.
3. Evaluation
Our team diligently compares the various offers extended by the banks. We offer guidance to aid you in making an informed decision, ensuring you choose the option that offers the most favorable conditions.
4. Submission
After obtaining all necessary information and documents, we facilitate the submission of your application to the chosen bank that will approve or reject the request.
5. Follow-up
After the approval, we remain actively engaged in the process, providing consistent follow-up until the final legal formalities are concluded.
MEET OUR TEAM
Certified Mortgage Broker
My name is João, Co-founder of Portugalxpert, Real Estate Buyer’s Agent, and Certified Mortgage Broker at Knowpedia (Registration 4639 Bank of Portugal).
In the last few years, I’ve been a Mortgage Broker, extremely dedicated to helping several international clients get the best mortgage solutions.
Why do you need a Mortgage Broker in Portugal? We are experienced in dealing with banks and have direct contacts, we follow the market every day, we know the product, we save you time, effort and money, and we offer tailored advice and guidance.
Tell us your mortgage requirements to finance your property in Portugal!
Need a Mortgage?
MORTGAGE NEGOTIATION
Key Factors to Negotiate in Mortgages
Loan Amount
The sum you're seeking to borrow is a crucial factor, as it often determines the price category in which the bank places you. It is through the LTV (loan-to-value) that most banks reward spread. The larger the loan, the higher your monthly repayments will be, which is what defines the effort rate given the available net income.
Loan Term
Minor adjustments in the term of your loan can have substantial impacts. Especially in loans for people over 50 years old. If you're looking to lower your monthly repayments, extending the loan term might be an excellent strategy. Negotiating maturity, in a large part of the cases, has a much higher impact than negotiating spread.
Type of Rate
If you value predictability, a fixed rate might be your best bet. However, if you're looking for a bit more flexibility, a variable or mixed rate could be more appropriate (in this option you’re more exposed to economic cycles). For this reason, if you’re investing, predictability might be a priority. Thus adopting a fixed rate or a mix between fixed and variable rates might be a smart strategy.
Spread
This is a term that often causes confusion. This value tends to be confused with the bank's margin. It's part of it, but not the whole. It's important to understand that maintaining a low spread might require you to subscribe to certain bank products (often called “vendas associadas facultativas”, in Portuguese). When embarking on spread negotiations, it is imperative to take into consideration the Euribor rate to which it is indexed. In the current landscape, the disparities among the different indexing terms hold substantial importance, surpassing that of the spread itself.
MTIC (Total Amount Charged to the Consumer)
This represents the total cost of the loan if all conditions are met. It includes all costs such as capital and interest repayment, associated insurance, account management fees, and associated products.
Life and Property Insurance
These types of insurance are usually required for a housing loan. In the typical scenario where the bank mandates these requirements, the customer cannot be obligated to engage with the insurer specified by the bank. Hence, insurance stands as one of the products that influence the spread. Should you decide to discontinue the insurance coverage, in certain instances, you may forfeit the associated benefits, potentially leading to an increase in the spread.
Other Loans and Credit Responsibilities
Your creditworthiness is a key factor in loan approval. The factor of solvency assumes paramount importance. It is not uncommon for loan applications to be declined due to the presence of multiple existing loans, which collectively impose a substantial installment burden, thereby impeding the feasibility of acquiring new loans. However, this predicament can be reversed by conducting a meticulous analysis of existing loan consolidation during the loan evaluation process.
MORTGAGE RATES
Type of Mortgage Rate
FIXED RATE
A fixed-rate mortgage allows borrowers to maintain a consistent repayment amount over a specified period, ranging from one year to as long as 30 years. One notable advantage of a fixed-rate mortgage is its protection against fluctuations in the bank's rate and the European base rate. However, early repayment of the mortgage incurs a fee of 2% on the repaid capital.
VARIABLE RATE
The variable-rate mortgage is the most prevalent type in Portugal, however, it’s losing traction lately. With a variable-rate mortgage, monthly payments may vary based on the prevailing interest rate. For most non-residents of Portugal, this type of mortgage can extend up to 30 years. Early repayment under a variable rate incurs a charge of 0.5% on the repaid capital.
MIXED RATE
For buyers seeking to shield the risk in the first years and also benefit from favourable conditions in the long run: mixed rate. This entails opting for a fixed rate for a predetermined number of years, guaranteeing stability during that period and a risk shield for around 2-5 years. This approach has gained significant traction, following the prevalence of variable rates.
OUR TRUSTED PARTNER
We work with Knowpedia
About Knowpedia
With expertise in analyzing mortgage proposals, whether new or transferred, as well as car loans and consumer credit, Knowpedia (Registration 4639 Bank of Portugal) has established itself as a prominent Credit Intermediary in the national market since 2017. Knowpedia’s mission is to meticulously tailor optimal solutions for clients, aligning with their unique needs and financial circumstances.
What do they do?
Their core operations involve a comprehensive exploration of available options within banking institutions. Through a meticulous process, they discern the most fitting offer that aligns seamlessly with the client's requirements, providing clear and rational explanations for the recommendations.
They diligently compile requisite documentation, meticulously analyze proposals, and deftly manage all associated formalities in collaboration with the respective banks. Their agile negotiation skills and swift communication methods underpin their efficiency and effectiveness, eliminating the need for clients to traverse multiple banking avenues.
Who pays for the service?
Their services come at no cost. Knowpedia does not levy any commissions or supplementary fees for facilitating mortgage acquisition. Partnering with Knowpedia ensures a streamlined, cost-free process. Their significant volume of mortgage negotiations empowers them to secure highly advantageous conditions for our clients. Notably, it is the financial institutions that remunerate them for the service, acknowledging the value we bring by introducing them to new and valuable clients.
FAQs
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Securing a mortgage in Portugal as an expat involves gathering specific documents that confirm your identity, financial status, and stability. These documents are essential for lenders to evaluate your capacity to repay the loan. Here's a comprehensive breakdown of the required paperwork:
General Documents for All Applicants:
Copy of Passport: Ensure it's valid and clearly legible.
Portuguese Tax Number (NIF): Obtainable from the Portuguese Tax Authority (Autoridade Tributária e Aduaneira).
Proof of Income: Can be sourced from your employer or, for the self-employed, your accountant.
Personal Bank Statements for the Last Three Months: Accessible via online banking or through a request from your bank.
Proof of Address: Typically, a recent utility bill (e.g., water, electricity, gas).
Recent Mortgage Statement: If applicable, obtainable from your current mortgage provider.
Proof of Saving or Investment Accounts: Statements from your bank or investment broker showing current values.
Purchase Commitment or Sales Contract: Agreement between you and the property seller, usually from the seller or the real estate agent.
Job Contract: This is one of the most important documents a bank will require since it is the main proof of your future income.
For Employed Applicants:
Last Year’s Tax Returns: Available from the tax authority of your residence country.
Payslips for the Last Three Months: Accessible from your employer.
For Self-Employed Applicants:
Last Year’s Tax Returns: Available from the tax authority of your residence country.
Business Bank Statements for the Last Three Months: Obtainable from your business bank.
Three Years of Company Profit & Loss and Balance Sheet: Prepared by your accountant or financial advisor.
For Those with Other Income Sources:
Proof of Pension Income for the Last Three Months: From your pension provider.
Copy of Tenancy Agreement for Rental Properties: From your property management company or tenant.
Last Three Months’ Statements Showing Rent Received: From your property management company or tenant.
Copy of Investment Certificates: Obtainable from your investment broker.
Tip! Banks might sometimes ask for supplementary documents during their assessment. It's advisable to consult with your lender or mortgage broker to make sure you have all necessary paperwork.
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When applying for a mortgage in Portugal, several fees and costs are associated with the process. Here's a detailed breakdown of these expenses:
Comissão de Dossier (Mortgage Application Fee): This is charged upon starting the credit process after the bank approves the financing. The fee can vary depending on the bank but typically ranges between €200 and €300.
Comissão de Avaliação (Bank Valuation Fee): This fee, ranging from €300 to €600, covers the bank's cost of hiring a valuation company to assess the property's value.
Taxes and Notary Fee: As a collective, these taxes and fees usually account for about 5% to 6% of the property's purchase price.
Stamp Duty: Once the mortgage is finalized, the Portuguese government imposes a stamp duty of 0.60% of the total mortgage amount. This amount is automatically deducted from the applicant's bank account.
Please be aware that while these are standard fees, the actual amounts can vary based on the specific circumstances of your purchase and the institutions involved. It's always a good practice to consult with your lender or mortgage broker for a detailed breakdown.
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1. Mortgage Quote: The first step in the process is to obtain a mortgage quote. After your initial assessment with a Mortgage Broker, you should receive a full mortgage quote within a few days days.
2. Submitting the Required Documents: Once you receive the quotes (known as FINE - Ficha de Informação Normalizada Europeia), we analyse the best option and send the required documentation. These documents will then be submitted for review.
3. Mortgage Offer: Upon approval of your mortgage, you will receive a formal offer. We will then review the conditions of this offer and assist you with the subsequent steps of the process.
4. Valuation Report: After you receive the mortgage offer, the bank will conduct a valuation of the property. The details of the mortgage will be confirmed as long as the valuation amount matches or exceeds the purchase price and there are no issues with the property.
5. Completion Procedure: Prior to the completion date, you will need to transfer your funds to the designated account. Once you have demonstrated that your funds for the property purchase are available, your lender will finalize the mortgage application. This will then set the completion date.
6. Completion: The final step involves signing the property and mortgage deeds in front of a Portuguese Notary. Once you've paid all related taxes and fees, you will oficially become the new owner of the property.