Mortgages in Portugal

Real estate investment in Portugal

The mortgage process

1. 1

   Get a Portuguese tax number (NIF) and open a bank account in Portugal.

2. 2

   Get a bank's preliminary approval. Required documents (sometimes additional ones are requested): passport, the last 3 months of bank statements, a tax form (payslip proof for employees / annual report for the self-employed), proof of bank account, proof of address, your last 3 payslips, credit rating, and proof of employment. The bank will assess your age, disposable income, job tenure, and financial stability.

3. 3

   Submit the property's documents to the bank, plus any additional documents it requests.

4. 4

   Sign the CPCV — the initial (promissory) contract.

5. 5

   The bank's own appraisal of the property.

6. 6

   Purchase home insurance and life insurance.

7. 7

   Sign the deed — the final contract and transfer of ownership.

Important points

• Translated documents: Documents for the bank need to be translated into English or Portuguese, and some will require notarized certification by a lawyer.

• When to sign the CPCV: Only sign the CPCV after getting preliminary mortgage approval. The deposit paid to the seller is not refundable if you breach the contract — so it's well worth getting legal support and understanding the contract and its implications before signing.

• How long it takes: The whole process can take time — usually one to three months (though we've also had cases approved within a week).

• No mortgage "porting": In Portugal it isn't customary to carry over an existing mortgage to a new property — if you sold a property and bought another, you close the old loan and open a new one.

Interest rates

This is the easy part — none of the complexity you get with mortgages in Israel: no rate mix, no unclear anchors, no principal linked to an index. In short, no surprises. The whole amount will be at a fixed or variable rate, your choice.

Fixed rate

Just as it sounds — the stated rate stays the same for the entire life of the mortgage.

Variable rate

A variable rate is tied to the Euribor index. Unlike index-linked rates in Israel, here the principal itself isn't linked to the index, and the amount you still owe doesn't inflate over the years.

What exactly is the Euribor rate? It stands for Euro Interbank Offered Rate — the average of the interest rates charged on short-term loans between a group of European banks. It's a rate that resets on a fixed period (you'll usually get Euribor 6 or Euribor 12 — the number denotes the period, and the rate resets every six months or every year, respectively).

The rate on your monthly payment is made up of two components:

• The spread: The bank's margin — a fixed component set when you take out the mortgage.

• The Euribor: The variable component. When Euribor rises, your monthly payment rises too; when it trends down, so does your repayment.

Mixed rate

In the past year, banks have started offering a fixed rate for the first 5 years, then a variable rate for the rest of the mortgage's life.

Early repayment fee

If you want to pay off the mortgage early, or sell the property, you'll need to pay an early repayment fee — after all, the bank is losing the interest you would have paid. Unlike Israel, here the fee is relatively minor, and you can ask your banker for a simulation at any time.

First published: 4 September 2026