Villas Key Imobiliária

Mortgage loans

Buying a house raises a number of issues and it is not always as simple as it sounds. That is why it is so important to be well accompanied by specialized mediators throughout the process, who minimize unpleasant surprises and unexpected costs. Anyway, here is a brief general explanation that can answer your first questions when a new purchase or mortgage process begins:

Do you know exactly what Mortgage Credit is?

Banco de Portugal, which is the maximum regulatory entity in Portugal and who establishes all the rules for the use and granting of credit (housing and consumer), determines that mortgage credit is a loan contract from the credit institution to the customer, for a previously established period of time, used for the acquisition, construction and execution of works in permanent, secondary or rental housing, as well as for the acquisition of land for construction of own housing.

Basically, it is a financial product that banks make available and that serves for consumers to finance the purchase of a home. It is usually the most burden on households, as it involves relatively high amounts and monthly payments.

Although most banks do not lend more than 85% of the value of the property and a maximum of 90% of the value of the purchase, there are some banks that can finance up to 100% of the purchase price for their properties. The maximum term is generally 40 years and the types of rate most practiced in the Portuguese market are the variable rate and the fixed rate.

In practice, this means that the monthly repayment amount is a installment whose value varies very little - in the case of maintaining interest rates (variable rate); or not at all in the case of the fixed rate. In the case of construction loans, only interest on housing loans is paid and the installment is reduced (capital shortage).

Above all, the most important thing when considering hiring a home loan is to carefully analyze all the offers from the various banks and find the one that offers you the conditions best suited to your needs.