Mortgages in Portugal in 2026: A Complete Buying Guide for Foreigners

Looking to buy property in Portugal and need to know more about how mortgage rates work in the country? You’ve come to the right place. This article covers everything you need to know about taking out a loan and setting up your own mortgage in Portugal, including how banks set their pricing structures, the trending averages, rate types, and so much more.

In Portugal, mortgage interest rates showed a slight reversal in March 2026, marking the first increase since early 2024. According to the latest information put out by Statistics Portugal (INE), in April 2026, the mortgage interest rates have increased from:

After several months of consistent declines, March recorded a modest increase of 0.9 basis points, bringing the average rate to 3.088%. Despite this uptick, rates remain well below the early-2024 peak (around ~4.6%), indicating that the broader downward trend has largely stabilised rather than reversed.

However, the most notable shift is in new mortgage contracts. For loans signed in the previous three months, rates decreased from 2.871% in February to 2.830% in March 2026, suggesting improved pricing for new borrowers even as overall averages edged higher.

The average monthly instalment on all contracts rose slightly to €402 in March 2026, increasing by €5 month-on-month and sitting €4 above March 2025 levels. Interest accounted for 48.8% of that payment, with the remainder going toward principal.

For new loans (last 3 months), the average monthly repayment increased to €700, up €5 from the previous month and significantly higher year-on-year, reflecting larger loan sizes despite lower new-loan rates.

With mortgage rates broadly stabilising and new loans still priced below the overall average, conditions remain relatively favourable for buyers. While March signals a pause in the downward trend, affordability remains stronger than in 2024, keeping 2026 an attractive window for property investment.

However, please note that these figures reflect market averages, as Statistics Portugal uses an implicit interest rate — defined as the average effective rate across all outstanding home loans, calculated as the interest due in the reference month divided by the capital outstanding at the beginning of that month.

Mortgage rates work differently in Portugal than what you might be used to in your country.

All the major banks in Portugal offer what’s commonly called “Crédito à Habitação” - loosely translated as a home loan or a housing loan. This is the most common way to purchase a house in Portugal – with buyers turning to banks to finance their property investment.

Generally speaking, banks in Portugal do not finance 100% of the property purchase, since there’s too much risk involved.  

Non-residents, or expats seeking to move to Portugal, can also apply for a housing loan to complete their own property acquisition – although the LTV (loan-to-value) is usually lower, with most banks willing to finance 60%-70% of the property investment.

The LTV determining factor will always be what’s lowest: either the purchase price or the bank appraisal value.

As a rule of thumb, the more of your own capital you put up front for your property purchase, the more favourable your mortgage rate will be.  

Please be aware that, in Portugal, bank branches operate independently from one another, which means you may get a different quote from the same bank that’s completely tailored to you.  

In Portugal, a variable mortgage rate is calculated by two sums:

It’s a benchmark set for different terms: 1 week, 1, 3, 6 and 12 months.

The Euribor changes over time depending on the European Central Bank policies and conditions in the money market. 

But there's more than one type of mortgage rates in Portugal. There's also: fixed and mixed.

If the conditions align, you might be able to negotiate a fixed rate mortgage with your Portuguese bank. 

Essentially, you’ll have the same rate throughout the entire duration of the contract, guarding you from whatever fluctuations Euribor goes through.  

If you decide on early repayment, the bank typically charges 2,0% on the repaid capital.

With a variable mortgage rate, your monthly instalment will vary depending on whatever type of Euribor you chose. 

Each 3, 6 or 12 month-period, your bank will revise your monthly instalment according to the Euribor rate.

Additionally, the bank can charge you 0.5% on the capital you’ve repaid if you decide to repay earlier.

A mixed mortgage is, as the name suggests, a contract that combines both a fixed and a variable rate.

Usually, when contracting a house loan, a mixed rate means that it will remain fixed for a set period – how much depends on your personal situation, but a rough average is 5 years. 

After that time has expired, it switches to variable.  

Since late 2024, this has become the most common choice for new loans, according to Banco de Portugal analysis of new lending.  

Here’s a list of what you need to keep in mind that will affect the personal quotes you get from Portuguese banks.

Besides these considerations, you’ll also have to provide several documents for your mortgage application.

The following is not a static list, and not all banks will require all the documents, but keep in mind to have these nearby should they request them:

As a non-resident, expect to also provide translated and apostilled documents. If you’re employed, you should also prepare the latest pay slips you have, including up to 6 months. 

If you’re self-employed, you might also be asked to provide your own company’s balance sheet, as well as documentation pertaining to other sources of income.

When it comes to buying property in Portugal, there are always associated costs with the purchase. They are:

There are also specific costs when taking out a mortgage in Portugal:

Admittedly, one of the most difficult parts about moving to Portugal is the bureaucracy – which is already a headache by itself and becomes further complicated when you don’t understand Portuguese.

Not to mention, living in Portugal as an expat isn’t just about getting property. That’s just one step of the journey. 

There’s also the visa part – which one suits your needs? And what about your family? Are they coming too?

That’s why Portugal Homes is proud to be a one-stop shop for all your relocation needs to Portugal. 

As part of the broader Harland & Poston Group, we:

Our team pairs your finance plan with the right partners and the right property - that fit your risk and timeline. 

We coordinate valuation, documents, and deed so your completion stays on track until you own your property in Portugal.

As of March 2026, the implicit rate on all outstanding home loans stands at 3.088%, while the average for new contracts (last 3 months) is approximately 2.83%.

These give a reliable picture of the market level, though your personal quote will depend on your personal profile and property you’ve chosen. 

Recent data shows new mortgage rates hovering below 3%, with March 2026 averaging around 2.83%, continuing to offer more competitive pricing than the overall loan stock.

Yes, foreigners can get a mortgage in Portugal.

For expats and non-residents, the maximum LTV is between 60% to 70%, though this amount is always dependent on your personal context.

Currently, with Euribor rates decreasing, the lending conditions are in the buyer's favour.

Portugal's lower cost of living, reflected also in the property market, when compared to other European countries, make it a more better choice for private investors.

If you're already retired, you can still take a mortgage in Portugal if you have steady income from other sources, including pensions. 

However, most banks will not offer mortgages if you're above a certain age threshold.

Because lenders add a spread to Euribor that reflects your LTV, residency status, income stability, and property choice. 

Euribor explains the direction, but the spread explains the difference between borrowers.