How much does it cost to get a mortgage?

Home loan: The bank financing is not 100%.

When considering getting a home loan to buy your house, you should know that the bank does not finance 100% of the property's value.

Currently, limits are imposed on mortgage financing by the Bank of Portugal. For credits aimed at housing and construction for own and permanent use, banks can lend up to 90% of the property value, and for credits with mortgage guarantee or intended for other purposes, banking institutions are allowed to lend up to 80% of the value. Financing of properties at 100% is only possible if the property being purchased belongs to the bank.

In other words, if you want to buy a house with a mortgage credit, know that, from the outset, you will need to have available capital corresponding to at least 10% of the property value. It is important to emphasize that this percentage corresponds to the lowest value between the acquisition value or the appraisal value. That is, if the property is for sale for 200 thousand euros, but it is appraised for 180 thousand euros, the percentage will be 10% of the appraisal value (in this case, 18 thousand euros).

But in addition, there are still other costs associated with credit, which we will see next.

You have to pay two taxes on the deed.

In addition to the initial amount needed for the purchase of the property, you will also have to pay two taxes at the time of the deed: the Stamp Duty and the Property Transfer Tax (IMT).

Stamp Duty is the oldest tax in the Portuguese tax system, corresponding to 0.8% of the property acquisition value. Therefore, if the property has a registered value of 200 thousand euros, it pays a Stamp Duty of 1,600 euros.

On the other hand, the IMT must be paid on the highest value, between the property acquisition value and the Tax Asset Value (VPT), which is found in the property book. The value of this tax also depends on factors such as the rate to be applied, from 1% to 8% (varies according to the property value), the location of the house, and its respective purpose. But know that there are situations where you may be exempt from paying IMT, such as in cases where the property for own and permanent habitation does not exceed a value of 97,064 euros on the mainland, and 121,330 euros in the Autonomous Region of Madeira or the Azores.

The banks charge process fees.

After that, along with the initial capital to provide to the bank and the two taxes to be paid, you may also face process expenses. You will have to pay bank commissions, such as evaluation, opening and process study, formalization, and make a mutual registration with a mortgage.  

The total cost of bank commissions can range from 500 euros to 1,300 euros. The combined registration with mortgage, in Casa Pronta, has a value of 700 euros.  

So, get ready to pay this amount to the bank, along with the costs mentioned above.

I already have the key in hand, now what?

After using their savings to pay all the mentioned expenses, remember that being a property owner also comes with costs.

In addition to costs for decoration, furniture, appliances, water, gas, electricity, and communications, you may also have to pay the monthly condominium fees if you live in an apartment building, and annually the Property Tax (IMI).

The condominium fee depends on the building and its location, with an average cost of around 30 euros per month.

Regarding the IMI, this is a tax that must be paid once a year by all property owners. The amount to be paid depends on the municipality where the property is located, with limits: It can range from 0.3% to 0.5% of the VPT in urban buildings, and up to 0.8% of the VPT in rustic buildings.

IMI can be paid in a single payment or in installments. It depends on the owner's preference and the amount to be settled. In other words:

• If the IMI value is up to 100 euros, pay in a single installment in May.
• If the amount to be settled is between 100 and 500 euros, it is possible to pay in two installments, in May and November.
• And if the amount is over 500 euros, you can pay in three installments, in May, August, and November.  

But if the property owner has an IMI payment of more than 500 euros and wants to pay in a single installment, they can also do so.

So, even having the key to your new dream home in hand, you should always reserve a portion of the budget for these expenses.

Because it is a complex process, ensure personalized support by a credit intermediary Poupança no Minuto on your housing credit. Ensures a quick, assertive, and free response. And also clears up all your doubts about the costs of the process or others! Simulate directly here: