When buying a home in Portugal as a foreigner with a mortgage, it is important to be aware that the conditions offered may differ from those applicable to residents.
Differences in loan conditions
For resident citizens, banks usually finance between 80% and 90% of the property’s value. For foreign citizens, this percentage normally ranges from 70% to 80%.
Other financing conditions, such as terms and interest rates, may vary from bank to bank, and the maximum loan term generally does not exceed 30 years.
Another factor some banks consider is the applicant’s country of residence. Living in a European country may be seen as a lower risk compared with living on another continent.
Documents required
To apply for a mortgage in Portugal, you need to gather the following documents so that the bank can assess the risk and propose suitable conditions:
- Personal identification (passport);
- Tax Identification Number (NIF);
- Last 3 payslips;
- Bank statements for the last 6 months;
- Latest tax return;
- Proof of employment (employment contract, statement of permanent employment).
Tax Identification Number (NIF)
To buy a home in Portugal, whether with a mortgage or your own funds, you must obtain a Tax Identification Number (NIF). To do so, you need a fixed residence in Portugal (tax domicile) or, failing that, you must appoint a tax representative in the country.
The tax representative can be a trusted person, such as a friend, relative or acquaintance, or even a company or lawyer, who handles the process of obtaining the NIF. If you choose a company or lawyer, there may be associated costs.
The tax representative will have certain obligations, including receiving correspondence and access passwords to the Tax Portal (Portal das Finanças) on your behalf.
If you already have a tax address in Portugal, you only need to present the identity document from your country of origin or passport (with an entry visa for Portugal or the Schengen Area) and your residence permit.
Contact us to find out more.
