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Getting a Mortgage in Portugal

How much a Portuguese bank will lend you, the 45% income rule, the under 35 state guarantee, the documents, the steps, and what it all costs.

Getting a Mortgage in Portugal

Last verified: September 2026.

Who this is for

  • You want to borrow from a Portuguese bank to buy a home here, whether you live in Portugal or abroad.
  • You are 35 or under, live in Portugal for tax, and are buying your first home.
  • You already have a Portuguese mortgage and want to know about repaying early or falling behind.

Not for you if: you are still deciding whether, where, and how to buy. Read "Buying Property in Portugal as a Foreigner" first.

Updated September 2026. Since 1 August 2026, banks should keep your repayments on all your loans at 45% of your net income or less, down from 50%.

A Portuguese mortgage (crédito habitação) lets you borrow up to 90% of a home's value if you will live in it, or 80% otherwise. Your repayments on all your loans should stay under 45% of your net income, tested at a higher rate. If you are 35 or under and buying your first home, a state guarantee can take you to 100% until 31 December 2026. Allow 6 to 12 weeks. On top of your deposit, budget about 7% to 10% of the price for taxes and fees.

Who can get a mortgage

Portuguese banks lend to residents and non-residents, and to EU and non-EU citizens. Your nationality matters less than where your income comes from and whether you will live in the home.

Whatever your situation, you need:

If you live in Portugal, banks treat you like any Portuguese borrower. Some banks want to see your first Portuguese tax return, or a few months of salary paid into a Portuguese account, before they offer their best terms.

If you live abroad, you can still borrow, but expect a smaller loan and more paperwork. The Banco de Portugal limits are the same for everyone. Banks then set their own, stricter rules for non-residents. Many lend 70% to 80% of the value to non-residents. If you will not live in the home, the 80% ceiling for "other purposes" applies anyway. If you are a non-EU resident abroad, you may also need a fiscal representative. See "Appointing a Tax Representative in Portugal".

How much you can borrow

The Banco de Portugal sets three limits for new home loans. They are a recommendation, not a law, but banks must explain any case where they go beyond them.

The loan compared with the home's value

  • Your main, permanent home: up to 90%.
  • A second home, a holiday home, or a rental: up to 80%.

The bank uses whichever is lower: the price you pay or its own valuation. If you pay €220,000 and the valuer says €200,000, a 90% loan is €180,000. You pay the other €40,000 yourself. The old exception that let banks lend 100% on homes they owned themselves ended on 1 August 2026.

Your repayments compared with your income

Since 1 August 2026, your monthly repayments on all your loans should not exceed 45% of your net monthly income. That includes car loans and personal loans with a fixed repayment plan. Credit cards and overdrafts are not counted. If you borrow with someone else, the bank counts every other loan each of you has, in full.

The bank tests this at a higher rate than you will actually pay. For a loan of more than ten years, it adds 1.5 percentage points. If you will be over 70 before the loan ends, and are not yet retired, the bank also cuts your income by at least 20% for the years after 70, to allow for a smaller pension.

Example: if your household takes home €3,000 a month, all your loan repayments together, at the tested rate, should stay under €1,350.

Each bank may go over 45% for up to 10% of the money it lends in a half-year. Those exceptions usually go to borrowers with high incomes or large savings.

How long you can borrow for

  • If you are 35 or under: up to 40 years.
  • If you are over 35: up to 35 years.

If two of you borrow together, the age of the older borrower decides the limit.

Many banks also want the loan repaid before you reach 75, but this is each bank's own rule. Ask before you apply.

If you are 35 or under

Two government measures help young buyers. They are separate, and you can use both.

The state guarantee

If you cannot put down the usual 10% deposit, the State can guarantee up to 15% of the price. That lets the bank lend up to 100%. You still pay the taxes and fees yourself.

You qualify if all of these apply:

  • You are between 18 and 35.
  • You are tax resident in Portugal, with no tax or social security debts.
  • Your income is within the eighth income tax band or lower.
  • You do not own any urban property.
  • You have not used the guarantee before.
  • The price is €450,000 or less, and you borrow at least 85% of it.
  • Every buyer is also a borrower on the loan.

You must sign the loan by 31 December 2026. The government has not announced any extension. The guarantee lasts ten years from the signing. Not every bank offers it, so ask.

No IMT and no purchase stamp duty

If you are 35 or under and buying your first home to live in, you pay no IMT and no 0.8% stamp duty on a price up to €330,539 in 2026. Between €330,539 and €660,982, you pay IMT at 8% only on the part above €330,539. Above €660,982, there is no relief.

You must not be anyone's dependant on a tax return that year. You must not own a home now, or have owned one in the last three years. You must move in within six months, and keep it as your main home for six years. If you do not, you lose the relief.

This relief does not cover the 0.6% stamp duty on the loan. See "Claiming the Under-35 IMT and Stamp Duty Exemption in Portugal".

Choosing an interest rate

Your rate is either linked to a market rate or fixed.

  • Variable rate (taxa variável). Euribor, the euro interbank rate, plus the bank's margin (spread). Most Portuguese loans use the 6-month or 12-month Euribor. Your rate changes when the Euribor period ends.
  • Fixed rate (taxa fixa). The same rate for the whole loan. You know your payment, but it usually starts higher.
  • Mixed rate (taxa mista). Fixed for the first years, often 2 to 10, then variable.

Between 2022 and 2023, the 12-month Euribor rose from below zero to about 4%. On a €200,000 loan, that added hundreds of euros a month. If a rise like that would break your budget, look at fixed or mixed rates.

Banks lower the spread if you buy extra products, such as salary transfer, insurance, or a credit card. Work out whether the saving is worth the cost. If you later drop those products, the spread can go up.

Documents you need

The bank will ask for:

  • Passport or residence card, and NIF, for every borrower.
  • Your last three payslips, or two to three years of tax returns if you are self-employed.
  • Your last income tax returns (IRS), downloaded from the Portal das Finanças.
  • Your employment contract.
  • Three to six months of bank statements.
  • Your credit record. The bank checks the Banco de Portugal credit register (Central de Responsabilidades de Crédito) itself. You can download yours free on the Banco de Portugal website.
  • The promissory contract, the property's tax record (caderneta predial), and its land registry certificate (certidão permanente), once you have chosen a home.

If you live abroad, add:

Step by step

  1. Get your NIF and open a bank account. Do this first. Nothing else moves without them.
  2. Get an approval in principle. Ask two or three banks, or a broker, how much they would lend you. This takes one to two weeks and is not binding.
  3. Compare offers. Each bank must give you a standard information sheet (FINE). Compare the total annual cost (TAEG), which includes fees and compulsory insurance, and the total amount you will repay (MTIC). Do not compare interest rates alone.
  4. Sign the promissory contract. You pay a deposit, often 10% to 20%. Make sure the contract returns your deposit if the bank refuses the loan.
  5. The bank values the property. The bank sends a valuer. You pay the fee.
  6. Get the formal offer. Once approved, the bank gives you a binding offer and a draft contract. You have at least seven days to think it over. The offer stays valid for at least 30 days.
  7. Arrange insurance. You need life insurance and home insurance for the loan. You can choose another insurer if it gives the same cover. The bank cannot refuse it, although it may raise the spread. See "Getting Home Insurance in Portugal".
  8. Sign the deed. You sign the purchase and the mortgage on the same day, at a Casa Pronta counter or a notary. The bank pays the seller, and you get the keys. See "Using Casa Pronta to Buy or Sell a Home in Portugal".

What it costs

On top of your deposit, budget roughly 7% to 10% of the price for taxes and fees.

CostAmount
IMT (purchase tax), main home0% up to €106,346 in 2026, then rising bands up to 8%
Stamp duty on the purchase0.8% of the price or tax value, whichever is higher
Stamp duty on the loan0.6% of the loan, for loans of five years or more
Stamp duty on interest4% of each interest payment, included in your instalment
Deed and registration at Casa Pronta€700 for purchase plus mortgage (€50 per extra property)
Bank valuationUsually €200 to €400
Bank arrangement feesVaries; negotiate them
Life and home insuranceDepends on your age, the loan, and the home

Example: a €300,000 main home with a 90% loan of €270,000.

  • Deposit: €30,000.
  • IMT: €10,542.
  • Stamp duty on the purchase: €2,400.
  • Stamp duty on the loan: €1,620.
  • Casa Pronta: €700.

That is about €45,300 before valuation, bank fees, and insurance. If you are 35 or under and qualify for the young buyers' relief, the IMT and €2,400 purchase stamp duty fall away. For the full IMT tables, see "Buying Property in Portugal as a Foreigner".

Using a mortgage broker

A credit intermediary (intermediário de crédito) sends your file to several banks and negotiates for you. Brokers must be registered with the Banco de Portugal. Check the register on the Banco de Portugal website before you sign anything.

Many brokers are paid by the bank, so you pay nothing. Some charge you a fee. The broker must tell you in writing how they are paid before they start.

Repaying early

You can repay part or all of your loan at any time. The bank can charge a fee:

  • Variable rate: up to 0.5% of the amount you repay.
  • Fixed rate: up to 2% of the amount you repay.

From 2023 to the end of 2025, the fee on variable-rate loans for your main home was suspended. That suspension ended on 31 December 2025. Parliament rejected proposals to extend it.

If you cannot pay

If you think you will miss a payment, tell your bank at once. The law gives you two protections:

  • Before you fall behind: the bank must have a plan to spot borrowers at risk and offer solutions.
  • After you fall behind: the bank must start an out-of-court process to renegotiate the loan (PERSI). While it runs, the bank cannot take you to court over the debt.

Free help is available from consumer associations such as DECO, and from the official support network for indebted households listed on the Banco de Portugal's bank customer portal.

Tax relief on mortgage interest

If you signed your mortgage before 1 January 2012, you can deduct 15% of the interest on your main home from your income tax, up to €296 a year. Loans signed from 2012 onwards get no relief.

Sources

Last verified September 2026. Rules and fees change; check the official source before acting.

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