A mortgage when you live in Portugal: how much you can borrow and how the process works

For home loans in Portugal only — offers from Portuguese banks, under Portuguese taxes and fees. The banks’ documents will still be in Portuguese; this page explains them in English.

Before you have a FINE (the offer sheet a Portuguese bank issues) you can already work out most of what the bank will decide, because it decides with three Banco de Portugal rules: the payments on all your loans may not exceed 45% of your net income, measured at a higher interest rate than the one offered; the loan may not exceed 90% of the value of the home you will live in; and the term may not exceed 40 years up to age 35, or 35 after. Run those numbers with your income, your existing loans and your savings, and add up the cash needed on the day of the deed. The process then runs in two stages: a pre-approval on your documents, asked of three or more banks, and, once you have chosen the home, the valuation, final approval with the FINE, 7 days to compare, and the deed.

Updated 3 November 2026

The three rules that decide how much you can borrow

They come from the Banco de Portugal’s Macroprudential Recommendation 1/2026 (in Portuguese), which applies to every application assessed since 1 August 2026, resident or not. They are recommendations, but banks almost always follow them: they may exceed the payment limit on only 10% of what they lend each half-year.

Debt-to-income (taxa de esforço) up to 45%. The payments on every loan of every borrower — the new one and the ones you already have, from the car to a personal loan — are added up and divided by net monthly income. The new loan’s payment is not the one on the offer: it is priced at a higher rate, 1.5 percentage points up on a term over ten years. A loan that only fits at today’s rate is already refused.
Loan-to-value (LTV) up to 90% on the home you will live in, 80% on a second home or a buy-to-let. It is measured on the lower of price and the bank’s valuation: if the valuation comes in under the price, the deposit goes up.
Term up to 40 years if the oldest borrower is 35 or under, up to 35 if older. If the loan runs past any borrower’s 70th birthday, the bank counts a lower income for them — at least 20% less, in proportion to the years past 70.

Income means net of tax and social contributions, per year, divided by 12 — so bonuses and the Portuguese holiday and Christmas pay count too. The bank reads it from your last tax return or your last three months of payslips.

Running the numbers, before you talk to a bank

Add up each borrower’s yearly net income and divide by 12.
List the payments you already make: car, personal loan, cards on a repayment plan.
Your maximum payment is 45% of monthly income, minus those payments.
See what loan that payment pays off at the test rate: the average rate on new loans, 3.00% in August 2026, plus 1.5 percentage points, over the longest term your age allows.
Compare it with 90% of the price. The lower of the two is what you can borrow; the rest of the price is your deposit.
Add up the cash for the day of the deed: deposit, IMT and stamp duty on the purchase, stamp duty on the loan, the deed and registrations, and the bank’s fees. Do not leave your savings at zero.

Example: a couple living and working in Portugal

Two borrowers aged 29 and 27, with €3,100 net a month between them, bonuses included, and a car loan of €250 a month. They want a €300,000 home to live in, their first.

Term: 40 years, the most for anyone 35 or under. The older one finishes at 69, before 70, so their income counts in full.
Maximum payment: 45% of €3,100 is €1,395; less the car, €1,145.
At the test rate, 4.50%, that payment pays off about €254,000 over 40 years.
LTV would allow €270,000, 90% of the price. On that loan, the test payment plus the car’s comes to 47% of income: over the limit.

What holds them back is the car loan. Without it, the same sum reaches €310,000, and €270,000 goes through. Either they pay off the car first — the bank accepts an old loan being settled before the new one is paid out — or they put down a bigger deposit.

With the car paid off and €270,000 borrowed, the payment at the average rate would be about €967 a month. Cash on the day: €30,000 deposit, no IMT or stamp duty on the purchase (both are 35 or under and the price is below €330,539, so the young buyers’ exemption covers them), €1,620 stamp duty on the loan and about €700 for the deed and registrations — roughly €33,000, plus the bank’s fees.

Being 35 or under and buying a first home, they can also ask for the public guarantee of Decree-Law 44/2024 (in Portuguese), which lets the bank lend up to 100% on a home up to 450,000 €. It removes the deposit but not the payment test: the loan still has to fit within 45%. Check with the bank that the guarantee is still available.

How the process runs, from the first request to the keys

Credit report. First of all, get your mapa de responsabilidades from the Banco de Portugal website, signing in with the Chave Móvel Digital or your tax portal credentials. It is free, lists every loan in your name, and the bank will read it anyway.
Simulation and pre-approval. With your personal and income documents, ask three or more banks. Each tells you how much it will lend in principle. It costs nothing and commits you to nothing: it tells you how far up you can look.
Promissory contract (CPCV) and deposit. Once you have chosen the home, you sign the promissory contract and pay a deposit (sinal), often 10% to 20% of the price. Ask for a clause that returns it if the loan is refused: without one, you lose it.
Valuation. The bank sends a valuer to the home and charges you the valuation fee. If the valuation comes in below the price, the loan is worked out on the valuation and the difference comes out of your deposit.
Approval and FINE. The bank approves the loan and hands over the FINE with the terms for your case, together with the draft contract. The law gives you a 7-day reflection period from that moment: this is when to put the FINEs side by side and negotiate.
Insurance. The bank requires life and home insurance, but cannot make you buy them from it. Outside the bank, life cover can cost a good deal less, and the saving sometimes beats the rate discount you give up by not taking the bank’s.
Deed. Purchase and loan are signed in the same act, at a Casa Pronta desk or a notary, once IMT and stamp duty have been paid. The bank pays the seller, the registration is made and you get the keys.

From the promissory contract to the deed is usually a few weeks to two months — whatever deadline the contract sets. If the loan may need longer, agree it with the seller before signing.

What the bank looks at beyond the numbers

Your employment contract: permanent and past the probation period counts most; fixed-term or newly started may need more guarantees.
Self-employment: banks average two years of declared income.
Your history: defaults on the credit report close doors even with the payment ratio in order.
What is left after the deed: a bank is wary of a buyer left with no savings.

These sums say what the rules allow, not what a bank will approve. The decision, the terms and the rate are only written down in the FINE.