Yes, foreigners can get a mortgage in Portugal. Portuguese banks regularly finance property purchases for non-residents, whether they are EU or non-EU nationals. However, lending conditions differ from those offered to residents, and understanding these differences is essential for proper financial planning.

Portuguese banks are generally open to lending to foreign buyers. Residency in Portugal is not mandatory, but banks will assess the buyer’s country of residence, income stability, and credit profile.

Both EU and non-EU citizens can apply for mortgages, provided they meet the bank’s requirements. Most financing is offered directly by Portuguese banks, although some international banks with Portuguese operations may also provide cross-border solutions.

How Much Can Foreigners Borrow?

- The loan amount depends on the buyer’s residency status and the bank’s valuation of the property.
- Non-residents: typically 60–70% Loan-to-Value (LTV)
- Portuguese residents: up to 70–80% LTV

The LTV is calculated based on the lower of the purchase price or the bank’s valuation, meaning buyers should be prepared to provide a larger equity contribution if the valuation comes in below the agreed price.

Mortgage Terms and Interest Rates

- Mortgages in Portugal are commonly linked to the Euribor, with either variable, fixed, or mixed-rate options.
- Loan terms usually range up to 25–30 years
- Maximum age at loan maturity is typically 70–75 years
- Interest rates depend on the borrower’s profile, income currency, and risk assessment
- Foreign income is accepted, but banks may apply more conservative affordability ratios

Documentation Required
Foreign buyers should expect to provide:
- Passport or ID
- Portuguese NIF (tax number)
- Proof of income (salary slips, contracts, or business accounts)
- Recent tax returns
- Credit report from the country of residence
- Portuguese bank account

All documents not issued in Portuguese may need to be translated or certified.

Costs Associated With a Mortgage
In addition to property taxes, buyers should budget for mortgage-related costs:

- Bank valuation fee
- Loan arrangement or processing fees
- Stamp duty on the loan amount
- Mandatory life and property insurance

These costs vary by bank and loan structure.

Madeira-Specific Considerations
In Madeira, banks pay close attention to:

- Property location and accessibility
- Whether the property is urban or rural
- Compliance with the PDM (Municipal Master Plan)

Properties with licensing issues, agricultural classifications, or planning restrictions may face lower valuations or be refused financing altogether. This makes zoning and legal verification particularly important on the island.

Common Mistakes Foreign Buyers Make

- Expecting financing above 80–90%
- Ignoring zoning or licensing restrictions
- Underestimating total monthly costs
- Starting the mortgage process too late in the purchase timeline