How much is the initial down payment for the housing credit?

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What are the maximum values the bank finances?

When buying a house with a housing loan, currently, you must pay an initial amount, usually referred to as a "down payment", since banks do not finance the acquisition at 100%.

Without complete loans from banks, maximum limits are established for the amount of financing banks can provide.

The Bank of Portugal (BdP) then defines that, for credits aimed at housing and own and permanent construction, banks are authorized to lend up to 90% of the value of the property (acquisition or evaluation, the lower value). And for credits with mortgage guarantee or aimed at other purposes, banks can lend up to 80% of the value of the property (also the lower value between acquisition and evaluation). [Link to article on credits for housing and construction: https://www.poupancanominuto.com/credito-habitacao?utm_source=poupanca-no-minuto&utm_medium=artigo&utm_campaign=348-creditos-destinados]

Mortgage credits with 100% financing are only possible, perhaps, on properties owned by the bank and that have been foreclosed. Learn more about this topic here.

So, how much do I have to pay the bank?  

Therefore, when buying a house with a mortgage loan, you will (almost) always have to give an initial down payment to the bank.

The value itself will depend on the cost of the property. Let's see examples to make it easier:  

If you are buying a property for own and permanent housing with an acquisition cost of 280,000 euros and an appraisal value of 290,000 euros, the bank can lend 90% of 280,000 (the lower value). This means the bank will lend, in this case, 252,000 euros and you will have to provide the remaining 10% - 28,000 euros.

Now consider that the property you are going to buy for own and permanent housing has a purchase price of 300,000 euros, but the bank evaluates the property at 290,000 euros. The bank lends 90% of 290,000 euros (the lower value), that is, 261,000 euros. But the purchase price remains the same, so you have to give the remaining 261,000 euros up to 300,000 euros - 39 thousand euros.

If the property you are buying is intended for secondary housing, with an acquisition cost of 250,000 euros and the appraisal value being the same, the bank will lend 80% of that value. In other words, you will need to have as initial capital 50 thousand euros.  

So, the initial down payment amount you will have to give to the bank to proceed with your mortgage loan depends on the cost of the property, the acquisition, and the evaluation. But note that you can always pay a higher amount to the bank in order to pay off the maximum credit amount at an initial moment, as well as you can do it at any time during the credit contract.

Being accompanied throughout a credit hiring process can be crucial to avoid challenges! Through a 100% free and digital service, credit intermediaries from Poupança no Minuto obtain several financing proposals to present to you, handle all the associated bureaucracy, answer all your questions, and advise you on which proposal to move forward with! Moving forward... we don't leave your side until the day of the deed. Contact us and start the process today!