Portuguese mortgage glossary

Terms

FINE (ESIS)

Ficha de Informação Normalizada Europeia — the Portuguese version of the European Standardised Information Sheet. The document a Portuguese bank must hand over with every mortgage offer, always with the same sections: amount, term, TAN, TAEG, MTIC, fees, required insurance and payment plan. It is the only way to put offers from different banks side by side without relying on each bank’s own simulation.

Spread

The bank’s margin, added to the index to make the interest rate. On a variable rate, Euribor moves and the spread stays: it is the part of the rate you negotiate, and the part that tells one bank from another. It depends on how much you borrow against the value of the home, on income, and on which products you agree to take.

Euribor

The rate at which euro-area banks lend to one another, published daily at 3, 6 and 12 months. It is the index for variable-rate mortgages in Portugal: the payment is recalculated at each review from that day’s Euribor plus the spread. The Euribor term is also the interval between reviews.

TAN (nominal rate)

Taxa anual nominal: the interest charged on the outstanding balance and nothing else. On a variable rate it is Euribor plus the spread; on a fixed rate, the agreed rate. It is what the monthly payment is worked out from, but it leaves out fees and insurance, so two identical TANs can be two loans of very different cost.

TAEG (APR)

Taxa anual de encargos efetiva global — the Portuguese APR: the yearly cost of the loan including interest, fees, stamp duty and the insurance the bank requires. It exists to compare offers, but each bank computes it with the Euribor, age, insurance and discounts it chose itself, so two banks’ TAEGs are rarely on the same assumptions.

MTIC (total amount payable)

Montante total imputado ao consumidor: the principal plus everything paid up to the last instalment, if the loan runs its full term and Euribor never changes. A large number, true on those assumptions — but almost nobody keeps a mortgage to the end without prepaying, selling or switching.

Fixed, variable and mixed rate

Fixed (taxa fixa): the same TAN for the whole term. Variable (taxa variável): Euribor plus spread, reviewed periodically. Mixed (taxa mista): fixed for the first years (typically 2 to 10), variable afterwards. Fixed trades uncertainty for a starting rate that is usually higher; mixed postpones the choice.

Bonificação (rate discount)

A cut in the spread in exchange for taking other products from the bank: paying your salary into it, holding its credit card, buying its insurance. It only pays off if the discount saves more than those products cost — and if the condition stops being met, the spread goes back up.

LTV (loan-to-value)

The amount borrowed divided by the value of the home — usually the lower of the price and the bank’s valuation. Banco de Portugal recommends a maximum of 90 % for a permanent own home. The lower the LTV, the better the spread banks tend to offer.

Life insurance (seguro de vida)

Required by the bank on almost every mortgage, to repay the balance if a borrower dies or becomes disabled. The bank may require the cover but cannot require its own policy: one from another insurer with the same cover will do, though it may cost a discount. The premium depends on age and on the outstanding balance, and changes every year.

Home insurance (seguro multirriscos)

Insurance on the property. The bank requires at least fire cover on the rebuilding value, since the home is the loan’s collateral. Like life insurance, it can be bought outside the bank.

IMT (property transfer tax)

Imposto municipal sobre as transmissões onerosas de imóveis. Paid by the buyer before the deed, on the higher of the price and the property’s tax value. For a permanent own home the rates are progressive, in brackets uprated in each State Budget. It does not change with the bank, but it is most of the cash needed on completion day.

IMT Jovem (young buyers’ exemption)

The exemption for buyers aged 35 or under on their first permanent own home (Decree-Law 48-A/2024). It waives IMT and the purchase stamp duty in full up to the top of the 4th bracket (€330,539 in 2026) and in part up to the top of the 5th (€660,982); above that there is none. When two people buy together, it applies to the share of each one who qualifies.

Stamp duty (imposto do selo)

Two different taxes with the same name. On the purchase, 0.8 % of the home’s value. On the loan, 0.6 % of the amount borrowed for terms over 5 years, paid once on completion day. The loan’s is the same at every bank for the same amount, but it counts towards the TAEG.

Early repayment (amortização antecipada)

Paying off part or all of the principal ahead of schedule. Portuguese law caps the fee at 0.5 % of the amount repaid on a variable rate and 2 % on a fixed rate. Afterwards the bank cuts either the payment or the term — and which one you choose changes the interest saved considerably.

Net cost over the horizon

The measure this tool ranks offers by: everything you pay during the years you expect to keep the loan — payments, insurance, fees and taxes — minus the principal repaid in that time. It is the real cost of having the money lent to you for that period, worked out on the same assumptions for every bank.

CPCV (promissory contract)

Contrato-promessa de compra e venda: the agreement between buyer and seller before the deed, setting the price, the date and the deposit (sinal). The deposit is usually the down payment, or part of it, and is at risk if the deed falls through for lack of a loan — which is why it is worth having the bank’s approval before signing.

Escritura (deed)

The act at which the home changes hands and the loan is signed, with a mortgage in the bank’s favour. On that day you pay any remaining down payment, IMT and stamp duty, the registrations, and the bank’s completion fees.