Mortgages

The following are examples of what are available here in Portugal for non-residents seeking to buy property. As non-resident status, you merely have to have your salary paid outside Portugal, i.e. if you are employed in a job in the UK, and can prove your monthly/yearly salary.

EXAMPLE 1

Straightforward Repayment Mortgage

Standard Rules:

- Up to age of 75
- Max 30 years (Could be longer term subject to status).
- Minimum of €50,000. No max.
- LTV (Loan to Value) limit is 80%. (However, in some circumstances, this can be raised to 100%).
- Interest spreads (Dependant on LTV).  Under 50% - Less than €150k - 1.6%, over €150k - 1.45%50 - 75% - Less than €150k - 2.1%, over €150k - 1.75%75 - 80% - Less than €150k - 2 .5%, over €150k - 2.15%

Above rates are called 'spreads' which are bank profits and should be added to the present Euribor rates.

During the period of repayment, there will be a repayment penalty of 0.5% of any capital repaid.

EXAMPLE 2

3 Years Interest Only Mortgage.

Standard Rules:
 Up to age of 75.Min term 10 years, max 30 years.Min of €50,000.Max of 80% LTVInterest rate of Euribor plus bank spread (profit) of 1.6% (Less than €150k) or 1.45% (Based on less than 50% LTV). Repayment penalties as for example 1.

EXAMPLE 3

Residual Mortgage Scheme

Explanation:

There is a scheme specifically for the benefit of property investors called a “Residual Mortgage” where you can opt to leave 70% of the loan until the end of mortgage term. For example, for a €100,00 loan you would pay capital/interest on €30,000, and interest only on €70,000.

Standard Rules:
Up to age of 65.Min term 5 years, Max 15 years. Min of €50,000Max of 70% LTVInterest rates are from 3.5% over Euribor. Particularly advantageous for borrowers who may have a property to sell elsewhere but are unable to at the time due to market conditions. Early repayment penalties are 0.5% throughout the term.

EXAMPLE 4

Equity Release Mortgage

Many homeowners in Portugal have seen significant increase in the value of their properties through the years. It is now possible to release some of your locked-in funds through an Equity Release Mortgage with the security of the property residing with the bank. There are NO questions asked about what the funds will be used for.

Standard Rules:
Up to age of 70.Min term 5 years, max 30 years.Min of €50,000Max of 65% of valuation.Interest rates are from 3.5% over Euribor.

There are many other schemes available such as construction mortgages which involve stage payment release by the banks. The valuation is made by the bank’s valuers by merely studying the plans and pre-determining the value of the property when complete. With this scheme, all loans are repaid with interest only until completion of build, where standard capital and interest repayment commences.

There are now mortgages of up to 50% LTV available for plots of land. Fixed rate mortgages are also now available.

As a representative of IMS, I would be happy to discuss any requirements you may have to facilitate any of the above mortgages for a property or land in Portugal.