Mortgages in Portugal: what makes up the interest rate and what a foreigner will be asked for
Almost everyone who buys a home here takes out a loan: according to INE, the average outstanding debt is €80,188 and the average payment is €418 a month. It works differently from what someone from Russia or Ukraine is used to. Most people have a variable rate made up of two parts: the market rate Euribor and the bank's margin, which is written into the contract for good; on the review date the payment changes by itself, without letters and without your consent. How much you get is not decided by the bank alone — the Banco de Portugal sets the ceilings: no more than 90% of the price of the home, no more than 45% of your net income on all repayments and no more than 40 years. A foreigner will be asked for a residence permit and a Portuguese tax return, and from people's accounts the deposit turns out larger than the rules say. This guide covers the whole journey: how to read the rate in the contract, what TAEG and FINE are, what the purchase costs on top of the price of the flat, what the bank cuts its margin for and what that leads to later, whether you can repay early and at what cost, how to move the loan to another bank and what to do if you can no longer pay. The rules and amounts are from the Banco de Portugal's Portal do Cliente Bancário, Decreto-Lei n.º 74-A/2017 and Decreto-Lei n.º 227/2012; everything else is from conversations with people who have been through it.
A home loan: what it is given for and what secures it
What Russian speakers call a mortgage is called crédito à habitação here. It is given for buying or building a home — a main home, a second home or one you will let out — for the land for it and even for the deposit ahead of a future purchase. Other loans secured on property fall under the same rules: for example, when several loans are consolidated into one secured on a flat.
The difference between a “main home” and everything else is not a formality, it is money. Habitação própria permanente is the home where you live and where your tax address is; for it the bank lends up to 90% of the price. For a second home or a flat to let, no more than 80%, and in practice banks ask for even more of your own money.
The security is a charge on the flat itself (hipoteca). It is entered in the property register and removed when the loan is repaid. If the payments stop, the bank goes to court, and the case can end with the flat being sold at auction; the proceeds may not cover the whole debt — in which case you still owe the rest.
The bank may also ask for a guarantor (fiador). Here it is important to read whether the guarantor has waived the “benefício de excussão prévia” in the contract: if so, the bank is entitled to claim the money directly from them without first trying to recover it from you. You cannot simply stop being a guarantor — only with the bank's consent and with another person taking your place.
How the purchase itself works — the contract, the deposit, the escritura, checking the property — is covered separately: How to buy a home in Portugal.
“First. Banks are reluctant to give mortgages on flats for renting out. They want a 50% deposit. Second. To my mind, the segurança payments are the last thing to think about when buying a property.”
Translated from Russian; the original is at the linkmyptaxes20.08.2025
The rate is Euribor plus the bank's margin
A variable rate has two parts, and they behave differently.
Indexante — the market rate at which banks lend money to each other. It is usually Euribor, and the contract sets its term: three, six or twelve months. The bank may not review it more often than once per that term: if you have six-month Euribor, the payment is recalculated every six months and no other way.
Spread — the bank's margin. It is written into the contract once and for the whole term; it does not change with whatever happens on the market. The bank sets it itself, looking at how much you are borrowing relative to the price of the home, at your income and at its own cost of money.
Hence the main consequence: the payment changes by itself. Nobody asks for your consent or sends a new contract — on the review date a different amount simply starts being taken. The bank must give 15 days' notice of a change in the rate.
The figures show how far it has swung in recent years. Euribor on 17 September 2026: 2.633% for three months, 2.962% for six and 3.345% for twelve. In 2021 it was negative, and at the end of 2023 it reached 4% — so the same loan can become hundreds of euros a month dearer or cheaper within a couple of years.
The practical conclusion for anyone already paying: find in your contract which Euribor you have and when the next review is. These are two lines, and they decide exactly when your payment will change.
“Type Euribor - what is it into Google. And you'll read all about it. A mortgage is given at interest. There's a fixed rate, which doesn't change. But in Europe they more often give a variable one, the average interbank interest rate. When it goes up, the mortgage payment goes up . When the mortgage contract is signed, you need to study carefully what rate is stated.”
Translated from Russian; the original is at the linkRussosEmPortugal26.09.2023
“Even if you've got citizenship, for the banks you're still a foreigner, and the requirements for you are higher. The interest rate is split into two components, the bank's spread and the EURIBOR rate, when we took the mortgage 5 years ago it was 1.4% in total, last year 5.2. Since EURIBOR was falling all last year, I expect it'll be 4.2, the rate is reviewed once a year from April in our case. But now the banks' spreads have also come down, you can hope to get a mortgage at 3%. That's about the variable rate, I can't say about the fixed one, but to me the terms there are worse.”
Translated from Russian; the original is at the linkleft4portugal15.02.2025
Variable, fixed, mixed — and the fact that the “fix” runs out too
The law allows three types of rate, and the bank must show a calculation for all three when it comes to a main home.
Variable (taxa variável) — Euribor plus spread, reviewed according to the term of the indexante. The most common option in Portugal: the payment is cheaper while rates are low and rises when they go up.
Fixed (taxa fixa) — the rate does not change for the whole agreed period. Dearer than variable in calm times and a lifesaver in turbulent ones. Early repayment costs more with it: up to 2% instead of 0.5%.
Mixed (taxa mista) — first a few years at a fixed rate, then variable until the end of the term. This is where a common disappointment hides: in most contracts “fixed” does not mean the whole term but the first five to ten years, after which the usual Euribor plus spread kicks in. Do not look at the word but at the line with the date when the fixed period ends.
One more thing nobody says out loud: a low rate in the first years often comes in exchange for buying the bank's other products — there is a separate step on this below.
“Mostly everyone writes about Caixa... They have an option with a fixed. preferential rate for the first few years with no bank spread.”
Translated from Russian; the original is at the linkbanksdeportugal17.07.2024
Compare banks by TAEG, not by the rate
The bank must give you three figures, and they mean different things.
TAN (taxa anual nominal) — the bare interest rate on the loan, without fees or insurance. This is the one printed in adverts.
TAEG (taxa anual de encargos efetiva global) — the full annual cost of the loan: the rate plus fees, plus compulsory insurance, plus everything else you pay because of the loan. This is the figure to compare offers by. Two banks with the same TAN can easily differ by half a percentage point in TAEG — that is exactly the difference in fees and insurance.
MTIC (montante total imputado ao consumidor) — how much money you will hand over over the whole life of the loan: the principal plus interest plus costs. It is a large and unpleasant number, but it is the one that shows the price of thirty years.
The Banco de Portugal has its own free payment calculator: you enter the amount, the term and the rate and get the monthly payment and the total cost. It is not a bank's offer and does not commit anyone to anything, but it calculates without the advertising.
“Rate (NIR): during the fixed-rate period — 4.290%; during the variable-rate period — 5.065%, which is the sum of the rate (six-month Euribor) of 3.425% and the base margin of 1.640%. …Since your loan has a variable rate, the actual total cost may differ from the one stated if the rate changes. For example, if the rate rises to 6.859% (six-month Euribor of 5.219% plus a margin of 1.640%)…”
myptaxes20.11.2024
FINE: the sheet of terms you must be given before signing
FINE — ficha de informação normalizada europeia, a Europe-wide standard sheet with the terms of the loan. It is issued twice: at the quote stage, when you are only shopping around, and again together with the approval, with the terms the bank is now prepared to give you. The guarantor must also be given the FINE.
What to look at first:
— the amount, the term and the type of rate; when buying a main home the sheet must include a calculation for all three types of rate, so there is something to compare;
— TAEG and MTIC — the full price of the loan;
— the list of products bought “as a bundle” and an honest answer on how much each of them lowers the payment;
— an example of what happens if the rate rises: the FINE must contain a calculation for the worst-case scenario.
Two time limits few people know about. The bank is bound by its offer for at least 30 days — in that time you can calmly go to another bank and compare. And you have at least seven days to think it over, during which the contract cannot be signed, even if you are very keen and the agent is rushing you.
The bank must also not just hand over the paper but explain it: what each term means, what happens if you do not pay and what the additional services affect. This is its direct obligation, not a courtesy.
“- what currency the income is in doesn't matter much, if we have a Portuguese sole trader business, the bank will look at the Portuguese recibos, they're in euros - besides income you'll also need to show you have the money for the deposit, and it probably makes sense to actually convert it from zloty into euros or dollars before showing it - the bank makes a mortgage offer based on all the documents provided and a specific property, it doesn't really work for a spherical mortgage in a vacuum - you can try - this is turning into a massive off-topic )”
Translated from Russian; the original is at the linkreciboverde08.06.2023
How much you can get at all: the Banco de Portugal's three ceilings
Apart from the bank's own rules there are general ceilings, and they explain most refusals.
LTV — how much of the price of the home. No more than 90% for a main home and no more than 80% for anything else. It is calculated from the lower of two figures: the purchase price and the bank's valuation. Hence the rule: you need at least 10% of the price of your own money — plus the purchase costs, which are not included in the loan.
DSTI — how much of your income. Repayments on all your loans together, including the new one, must not exceed 45% of your net income — what is left after tax and contributions. The threshold was lowered from 50 to 45% on 1 August 2026. It is calculated with a margin: the bank must check whether you could manage the payment if the rate rose by a further 1.5 percentage points.
Term. No more than 40 years if you are 35 or younger, and no more than 35 years if you are older. The average term across the bank's whole portfolio must not exceed 30 years — so an older person's term is cut more than the formal ceiling would suggest.
And a fourth rule people forget: the loan has to be repaid evenly, capital and interest together. New contracts should not have holidays of the “for the first two years we pay interest only” kind.
This is a recommendation, not a ban: a bank may depart from it, but then it has to justify itself to the Banco de Portugal, and it is allowed no more than a tenth of its lending volume in such loans per half-year. So exceptions happen, but they are few, and they are not made for a random customer.
“I'm not questioning DSTI as a tool, the sustainability target is legitimate. The objection is something else. By design, the sustainability indicator describes those who got a loan; a refusal isn't a protected household, it's a household outside the market, and it isn't reflected in the sustainability metric. Next — how the cost is distributed. The tightening applies to everyone, compensation only up to 35: term 37→40, IMT exemption, state guarantee of 100% LTV. For a borrower over 35 the term has stayed at 35 years since 2022, there are no concessions — he takes the cut with nothing in return. With a net income of €2,500 the repayment ceiling falls from €1,250 to €1,125.”
Translated from Russian; the original is at the linkmyptaxes12.08.2026
“The word ‘more willingly’ doesn't apply to mortgages ). No, the child won't make any difference. Only your income and the legal side (residence permit, contract and so on). The deposit will be from 20-30 percent.”
Translated from Russian; the original is at the linkleft4portugal11.02.2024
“Millennium jacked up the rate a lot that year, Caixa less. Not great info, but I can't remember the details now, in the end I bought without a mortgage. And they'd only give it for 35 years, although I asked for 10. They said you can pay it off early, but there's a clause that in some cases they'll also charge a fee for early repayment.”
Translated from Russian; the original is at the linkbanksdeportugal30.09.2025
What a foreigner will be asked for: papers that are not in the rules
Formally, nationality does not matter — the bank assesses income, commitments and the security. In reality newcomers are asked for more, and here is what is worth preparing in advance.
A residence permit. With one the conversation goes quite differently than without; some banks simply do not open a case without the card.
An IRS return for at least one year — and the nota de liquidação that goes with it. This is the tax office's assessment of your return, and it is not asked for out of spite: you file the return yourself, but the state does the assessment, and it cannot be forged.
The last three payslips or recibos verdes, the employment contract (a permanent one counts for more) and bank statements.
The money for the deposit — in the account and with a clear origin. The bank looks not only at the amount but at where it came from; if you sold a flat back home, you need to be able to show it with documents.
Your credit history here. There is no general “credit rating” in Portugal as there is in Russia: there is the Banco de Portugal's Central de Responsabilidades de Crédito, which shows what loans you have and whether you have had arrears, and the data there is kept for five years. You can request your own statement — it is useful to do this before going to the bank.
Refusals also happen for reasons that are not in the rules: place of birth, passport, the country your income comes from. That is no reason to give up — it is a reason to apply to several banks at once, which is the next step.
How to open an account and how banks here differ from what you are used to — How banks work in Portugal.
“For a mortgage, besides the residence permit you'll also need IRS for at least a year. You don't have to have an account at the bank where you're applying for the mortgage, they'll open one specially for it if the mortgage is approved, the process will just take longer because of compliance and so on.”
Translated from Russian; the original is at the linkbanksdeportugal12.08.2026
“We applied for a mortgage in September with a broker from idealista, I only had recibos for half a year. Then for a year and now I'm sending recibos, but some brokers, for example from max finance remax- all they wait for is this nota de liquidação, without it the case won't move.”
Translated from Russian; the original is at the linkreciboverde13.06.2026
“There's a database of your active loans. The amount of commitments, arrears. But the point is different, there's no general rating, the information is only kept for 5 years. If you take out a loan, the bank will use it to see whether you can manage the loan given your income and existing commitments, but there's no general credit rating that would improve your chances of getting a loan. And yes, Klarna instalments don't go in there. Build up your history with the bank :) Regular income, transparent spending.”
Translated from Russian; the original is at the linkbanksdeportugal21.12.2025
“Personally I know of successful cases of opening an account without a residence permit, with a manifestação in summer 24. But I also know of cases where, for example, a person with PT citizenship who has lived and worked in Portugal for more than 15 years, but was born in Russia - had their mortgage held up for a very long time precisely because of the Russian place of birth. Personal connections helped move the case along. So it's all relative…”
Translated from Russian; the original is at the linkchatporto05.01.2025
Apply to several banks at once
Applying to just one bank is the most common mistake newcomers make. Different banks' decisions on the same person vary a lot, and a refusal does you no harm: there is no single rating here that “gets spoiled by refusals”.
You do not have to open an account in advance: the bank that approves the loan will open one for it itself. The reverse is also true — keeping your salary at a bank does not mean you will get the best terms from it.
A credit intermediary (intermediário de crédito) is a person or firm who collects your papers and takes them round the banks. Opinions on them in the chats differ: some say an intermediary knows where which application will go through, others that they are only useful at the first consultation. Two sensible rules: an intermediary must be on the Banco de Portugal's register (you can check this on its website), and must give you the same FINE as the bank. The service may be paid, and you ask the price in advance.
Whatever you choose, compare by TAEG and by the total cost, not by the promise “I'll get you the best spread”.
“You can apply for a mortgage at ten banks at once if you like. You'll just submit a statement from the bank where you have an account (in fact from all the banks where you have accounts). The bank that approves the loan will open an account for you, and then you'll move your salary to that bank.”
Translated from Russian; the original is at the linkbanksdeportugal05.04.2026
“Generally lots of people in the chats say a broker increases the chance of the mortgage being approved because they usually have connections in the banks and they help get it approved because they have an interest in it.”
Translated from Russian; the original is at the linkchatleiria26.01.2026
“from my experience I'll say a broker is useless. might be useful only at a super early stage for a basic consultation.”
Translated from Russian; the original is at the linkchatleiria26.01.2026
The valuation: the loan amount depends on it
The bank lends not against the price you agreed with the seller but against the lower of two figures — the price and its own valuation. If the valuer comes up with less, you pay the difference out of your own pocket, and this is the most common surprise at the end of a purchase.
How it works under the rules:
— the valuation is done by an independent valuer on the CMVM register, not by a bank employee;
— you usually pay for it, and then the report is yours: the bank must give you the original or a copy within ten days of receiving it from the valuer;
— you can lodge a written objection to the valuation, and the bank must give a reasoned reply;
— you can demand a second valuation, but at your own expense;
— you can bring a report commissioned by another bank if it is less than six months old; the bank may refuse it only if the report does not meet legal requirements, or if it is more than three months old and the market has changed noticeably since;
— if the bank revalues the home on its own initiative, it may not charge you for it.
And about timing: the valuation is done for a specific flat, so a preliminary approval of an amount is not yet a loan. Several weeks pass between “we've been approved” and the money at completion, and part of that goes on the right of first refusal, which is checked before the escritura.
“The valuation means the bank valuation for the mortgage. You pay for it. From 350 euros. Plus the cost of a lawyer to get the money back. A flat that couldn't be sold was valued for nothing.”
Translated from Russian; the original is at the linkru_Portugal_pt19.05.2026
“Even with an approved amount everything still tends towards about a month. The bank has to do the avaliação and approve the specific flat. And another 2 weeks for the direito de preferência.”
Translated from Russian; the original is at the linkmyptaxes14.11.2025
Insurance and “bundled sales”: what the spread is cut for
Compulsory “bundled sales” are banned in Portugal. The bank may require only two things: an account (and it must accept an account at another bank) and suitable insurance for the loan. What is more, it must accept insurance from any company if the cover is the same as in its own offer. This is written plainly in the rules, and it saves serious money: life insurance taken elsewhere is often one and a half to two times cheaper than the bank's.
Everything else — a card, having your salary paid into that bank, a pension plan, health insurance — is voluntary. The bank may offer them in exchange for a lower spread, and then the FINE must include a calculation of how much each of them reduces the payment.
The flip side: if you later drop such a product, the bank may raise the spread back — but only within a year of you dropping it. Once a year has passed, it cannot raise it.
There are two things worth knowing about life insurance. First: the sum insured follows the outstanding debt down, while the premium usually rises over the years — because the age of the insured person goes up, not the debt. Second: it has a term and conditions, and when it is renewed the bank checks that everything has been paid.
And a separate rule almost nobody knows about. Since 2021 there has been a right to be forgotten: the bank and the insurer may not ask about a past serious illness if ten years have passed since the end of treatment (five if the illness was before the age of 21), and may not raise the premium or exclude risks from the cover because of it. For an illness that is being kept under control, two years of continuous successful treatment are enough.
“The bank worked out something like 250e a month for a loan of 360k e. Seems like a lot.”
Translated from Russian; the original is at the linkmed_strahovki_pt13.05.2025
“A question about life insurance with a mortgage: the mortgage is being paid down, the monthly premium is going up! It's gone up 10 percent in a year and a half.”
Translated from Russian; the original is at the linkmed_strahovki_pt16.04.2024
“it's a subsidiary of millennium. been using it for three years. salary account, mortgage, credit card, life and home insurance. all with them. decent support. if you need to choose a portuguese bank then only this one. but my main bank is revolut.”
Translated from Russian; the original is at the linkchatleiria04.09.2025
What the purchase itself costs on top of the price of the home
These costs are not included in the loan — they are paid with your own money, and you need to set aside a separate sum for them.
Stamp duty on the loan (imposto do selo). On the loan amount: 0.6% for a term of more than five years, 0.5% for a term of one to five years and 0.04% for a term of less than a year. Plus 4% on the bank fees themselves. On a €150,000 loan over thirty years that comes to about €900.
The bank's fee for processing the application. There can be only one — the bank may not charge several fees for “analysis and decision”. The valuation is paid separately from it.
The valuation of the home. In conversations people mention from €350.
Property transfer tax (IMT) and stamp duty on the purchase itself, the notary or Casa Pronta, registration. This is about the purchase rather than the loan, and it is covered in detail in How to buy a home in Portugal.
It is useful to know that a purchase with a loan can be done through Casa Pronta — the state's one-stop service, where the sale, the charge and the registration are all arranged at once.
When working out your budget, keep a simple thing in mind: a 10% deposit is the minimum under the rules, not in real life. In newcomers' accounts it is more often 20–30%, and for a flat to let banks ask for half.
“i don't have statistics, but from the information i have from friends who took mortgages, a foreigner probably shouldn't count on a deposit of less than 30%. although, for example, our manager at the bank said there are even cases with no deposit at all when they're selling a property that belongs to the bank itself.”
Translated from Russian; the original is at the linkmyptaxes01.06.2024
Early repayment: with a fee again
You can always repay early — it is your right, not a favour from the bank.
In part — at any point in the contract, any amount, on a regular payment date and with 7 working days' notice to the bank. In full — on any day, with 10 working days' notice.
From 1 January 2026 a fee is charged again: up to 0.5% of the amount repaid with a variable rate and up to 2% with a fixed one. This is a ceiling — your contract may say less or zero, and it is worth checking what yours says. The exemption that had applied since November 2022 was extended twice, the last time by Lei n.º 1/2025, and it ended on 31 December 2025.
There is no fee at all in three cases: the death of one of the borrowers, unemployment (you must have been registered with the job centre for more than three months; the certificate comes from IEFP) and moving for work.
On top of the fee, the bank may only claim what it paid on your behalf to registries, notaries and the tax office. It may not charge interest “for the future” — for the days between your payment and the date the next one would have fallen due.
Whether to repay early or invest the money is a matter of arithmetic: compare your rate with what a deposit gives you after tax. And ask the bank what it will do with the schedule: reduce the payment or shorten the term. The first eases the monthly budget, the second saves more interest.
“Honestly I still haven't understood how early repayment of a mortgage works in Portugal when you sell . But the contract says that for early repayment with a variable rate you have to pay something like just 0.2% of the amount owed.”
Translated from Russian; the original is at the linkschoolinportugal08.02.2023
“I haven't got one) I know about the penalty, but friends with mortgages say it still works out better to pay it off early”
Translated from Russian; the original is at the linkbanksdeportugal19.03.2026
“On the second question about the loan: "loan amortisation" (Amortização de Credito). This means you pay more towards the principal, not just the interest. How to do it at Millennium: 1. Check the terms – whether you can change the payment schedule without penalties. How many years have to pass after buying the property before you can request amortisation. 2. Request a recalculation – ask the bank to change the structure of payments. 3. Make an early repayment – if you can, make extra payments towards the principal. Pitfalls: - Sometimes the bank may charge a fee for changes.”
Translated from Russian; the original is at the linkRussosEmPortugal28.03.2025
Move the loan to another bank or renegotiate with your own
The spread is written into the contract for good — but the contract can be replaced.
Transfer (transferência). Technically this is full early repayment at the old bank and a new loan at the new one. The old bank may charge the early repayment fee (the same 0.5% or 2%), interest up to the day of repayment and whatever it paid on your behalf to registries and notaries. In return, it must within 10 working days give the new bank all the information: the outstanding debt, the term elapsed, the conditions. The new bank values the home and your affordability afresh — so this is a full application, not a re-signing of a piece of paper.
Renegotiation with your own bank (renegociação). Cheaper and quicker: the bank does not have to agree, but often does when it sees a competitor's offer in your hands. It is worth asking if your spread is noticeably higher than today's or if you have already repaid a significant part of the debt — the risk for the bank has become smaller.
The main rule of negotiating: look at the whole sheet, not one line. A lower spread is easily eaten up by a new fee, expensive insurance or a longer term. Compare two FINEs in full — the old one and the new one — and by TAEG.
“I read everything in full too, and people don't like that. The truth is that when I was negotiating the loan, at each new round of negotiation they'd correct the figure I'd asked about and make the others worse. First I renegotiated the spread — they corrected it as they should. Then I renegotiated the insurance — they corrected that too, but when I reread everything, the spread had magically gone back to its old value and other amounts had gone up.”
Translated from Portuguese; the original is at the linkr/literaciafinanceira14.09.2026
“What's more, sometimes a bank where you don't have an account offers to move your mortgage to them on better terms.”
Translated from Russian; the original is at the linkbanksdeportugal24.04.2026
Under 35s: the state guarantees the deposit
Since 2024 there has been a special scheme for people buying their first main home who are 35 or under. The state acts as guarantor to the bank, which makes it possible to finance 85 to 100% of the purchase — in other words, to do without a deposit.
Conditions worth knowing before going to the bank:
— the price of the home is no more than €450,000;
— the contract must be signed by 31 December 2026 — the scheme is time-limited;
— the guarantee itself is no more than 15% of the purchase price and lasts no more than ten years;
— the state has waived the right to have the bank claim from you first: if you do not pay, the bank may turn to the guarantee straight away;
— the bank is not obliged to give you a loan, even if you meet all the conditions.
Alongside this scheme there is an exemption from property transfer tax (IMT) and stamp duty for young people buying their first home — this is about the purchase itself rather than the loan, and it depends on the price of the home. You do not need to apply for the guarantee separately to the ministry: the application goes through the bank.
An important point about age and term: for a customer aged 35 or under the maximum term is 40 years, for older people 35. Here your year of birth affects both the payment and the amount you can get.
“I don't quite understand their worries. My mortgage rate is below 3%, I don't have a passport. My husband was 62 when we took it out. There are no special rates for citizens”
Translated from Russian; the original is at the linkmyptaxes03.11.2025
If you can no longer pay: PARI and PERSI
This is the most important part of the page, and it is better read in advance, not when the money has run out.
While you are not yet in arrears — PARI. If you realise the next payment may not go through, tell the bank in writing. The bank must give you a document setting out your rights and start the “action plan for the risk of default”: assess your ability to pay and offer a way out — a different term, a different schedule, consolidating loans. Banks are also obliged to look for signs of future defaults themselves, at least once a month.
When you are already in arrears — PERSI. This is an out-of-court procedure with time limits set in law:
— you must be put into it between the 31st and 60th day of arrears, or straight away if you ask in writing;
— you must be told you have been put into it within five days;
— within 30 days the bank must either propose a solution or say plainly that there is none;
— you have 15 days to reply to each proposal;
— the procedure ends on the 91st day, unless the parties agree to extend it.
Why this matters: while PERSI is under way, the bank may not terminate the contract because of the arrears, take you to court, sell the debt to a third party or hand its side of the contract to someone else. It is a legal breathing space for negotiation, and it is not granted out of the bank's goodwill.
What will not help: staying silent. Arrears go into the Central de Responsabilidades de Crédito, penalty interest and fees are added to the debt, and after that the bank may go to court — and then the case ends with the flat being sold at auction, and the proceeds may not cover the whole debt.
And something people constantly confuse: as long as you pay and keep the insurance in force, the bank has no grounds to take the flat. A closed current account does not in itself terminate the loan — you will have to pay another way, but the contract remains the contract.
“If you meet all the requirements - make payments on time, renew the insurance contracts, use the flat properly - the bank has no right to take it. Closing the current account at the bank doesn't automatically mean closing the mortgage. That's why I advised writing to the branch manager. A friend of mine has this situation at Santander. The bank closed his current account, on the day the instalment is due he goes to the counter and pays the amount in cash.”
Translated from Russian; the original is at the linkmyptaxes09.07.2025
“By law the bank can't terminate a mortgage unilaterally, even if they close your account, they have to let you pay the mortgage from another bank.”
Translated from Russian; the original is at the linkbanksdeportugal15.06.2026
Count the total cost, not just the payment
“A mortgage is cheaper than renting” is the most common argument in the chats, and it is only half true. The loan payment really is often lower than the rent on a similar flat. But an owner has things a tenant does not:
— the annual property tax, IMI;
— condominium charges;
— insurance — life and home;
— repairs, which are now yours;
— the cost of the purchase itself, which does not pay off straight away: selling after a year or two does not make sense.
Two more things worth weighing soberly. First: with a variable rate the payment can rise, and you should calculate not at today's rate but at the one the bank uses in its stress scenario — plus 1.5 percentage points. Second: a flat ties you down. A newcomer's plans change more often than you think, and selling a home takes months and costs money.
A sensible order is this: first use the Banco de Portugal's calculator to work out the payment on your amount and term, add the insurance, IMI and condominium charges, compare with the rent on a similar flat — and only then look at the listings. What a square metre costs by district is shown on our housing prices page; what people ask in rent and how renting works is in the guide How to rent a home in Portugal.
“If you have the money for the deposit, a mortgaged home is about 2 times cheaper than a rented one.”
Translated from Russian; the original is at the linkPortugal 🇵🇹 TravelAsk Chat08.02.2024
“My question is more on the practical side: rent goes nowhere, but if you pay the same amount for 5-10-15 years on a mortgage, then firstly part of the value (say, half) will have been paid off by the end, and secondly, with house prices continuing to rise, you might even end up in profit. Or at least over 5-10-15 years reduce the cost of housing: whether it's rented or owned.”
Translated from Russian; the original is at the linkmyptaxes10.07.2023
“We took out a mortgage recently. If you work it out, renting a flat that's comfortable for us would now be exactly 2 times more expensive , than the monthly payment. The variable rate is high now and is reviewed every 6 months. If we don't like Portugal, plans change, we sell the property and leave, it's going up in value now and isn't planning to drop. Even taking into account the early repayment penalties, it all looks pretty reasonable. Your own home , even a mortgaged one, and a rented one are, for me, worlds apart in terms of comfort of life.”
Translated from Russian; the original is at the linkschoolinportugal08.02.2023
What to bring
- Título de residência — without a residence permit most banks will not even start the conversation
- NIF and an account at a Portuguese bank (the bank will open an account for the loan itself if it approves it)
- An IRS return for at least one year and the nota de liquidação that goes with it
- The last three payslips or recibos verdes and the employment contract
- Bank statements for several months — and proof of where the money for the deposit came from
- A statement from the Banco de Portugal's Central de Responsabilidades de Crédito — your loans and arrears, kept for five years
- Documents for the flat: caderneta predial, certidão permanente, licença de utilização and ficha técnica — the bank looks at them too
- FINE — the sheet of terms; ask for it both at the quote stage and with the approval
Where people most often trip up
- The rate in the contract is Euribor plus spread: the spread is fixed for good, Euribor changes by itself on the review date
- In most contracts a “fixed rate” means the first five to ten years, not the whole term
- Compare banks by TAEG, not by the advertised rate: fees and insurance are in the TAEG
- The loan is calculated from the lower of two figures — the purchase price and the bank's valuation; you pay the difference
- 10% of your own money is the rules' limit, not real life: newcomers are more often told 20–30%, and up to half for a flat to let
- From 1 August 2026 DSTI is 45% of net income, and it is calculated with a margin for a 1.5 percentage point rise in the rate
- The bank is bound by its offer for 30 days, and the law gives you seven days to think it over, even if the agent is rushing you
- You can take life insurance outside the bank: it must accept a policy from any company with equivalent cover
- Dropping “bundled” products raises the spread only within a year of dropping them — not after that
- From 01.01.2026 early repayment again carries a fee: up to 0.5% with a variable rate, up to 2% with a fixed one
- There is no early repayment fee on death, unemployment of more than three months or moving for work
- A refusal from one bank does no harm: there is no single credit rating in Portugal
- While PERSI is under way, the bank may neither terminate the contract nor go to court — a legal breathing space, not a courtesy
- The state guarantee for under 35s applies only to contracts signed by 31 December 2026
How it went for people
Five refusals in a row, the sixth bank gave the loan
The family had a three-year residence permit, a long-standing job with a Cypriot company, an IRS return filed here and a deposit of three-quarters of the price — so the loan they asked for was small and well secured. Five banks refused, the sixth agreed. Anyone who sees a refusal as a final verdict should remember this case: each bank makes its own decision, and an application to one bank proves nothing. June 2023.
An e-mail address ending in .ru — and the flat nearly went to the bank
A family with Russian citizenship took out a loan in 2018 and paid for many years without a hitch. In 2026 the bank demanded updated documents, but in its system the wife had an e-mail address ending in .ru, and the bank did not accept e-mails from such addresses at all: the documents simply never arrived. The account was blocked, payments from tenants stopped being credited, the money in the account ran out, and the bank started charging penalty interest — according to the person telling the story, had they not acted quickly, the flat would have gone to the bank. The lesson from this case is simple and useful to everyone: the loan payment is taken from the account, and any hitch with the account is a hitch with the loan. Check what address and phone number the bank has for you, and do not wait until the arrears are a fact: the law gives breathing space to those who warned the bank in advance. June 2026.
Repaying early for fear of the account
A person with a loan at a bank that has started closing the accounts of customers with Russian citizenship is urgently transferring money to repay the loan in full: they are afraid the account will be closed and they will be left without the flat. The fear is understandable, but here the law is on the borrower's side: the bank may not terminate the loan contract because it has closed your current account, and must let you pay another way. Full early repayment in this situation is a choice, not an obligation, and it costs up to 0.5% of the outstanding debt with a variable rate. June 2026.
Retold in our own words from messages in open chats. The link leads to the full original message.