How much does it cost to get a mortgage?

Home loan: The bank financing is not 100% complete.

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

Currently, there are limits imposed on housing credit financing by the Bank of Portugal. For credits intended for own and permanent housing and construction, 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.

That is, if you want to buy a house with a mortgage credit, know that, initially, you will need to have available capital corresponding to at least 10% of the property value. Here, it is important to emphasize that this percentage corresponds to the lowest value between the acquisition or appraisal value. That is, if the property is for sale for 200 thousand euros, but 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 in the deed.

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

The Stamp Duty is the oldest tax in the Portuguese tax system, corresponding to 0.8% of the property acquisition value. So, if the property has a notarized value of 200,000 euros, it pays Stamp Duty corresponding to 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 can be found in the property tax schedule. The amount 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 purpose. But know that there are situations where you may be exempt from paying IMT, such as in cases where the property for permanent own housing 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.

Banks charge processing fees.

Afterwards, along with the initial capital to be made available to the bank and the two taxes that must be paid, you may also be faced with process expenses. You will have to pay bank fees, such as assessment fees, opening and process study fees, formalization fees, and register a mutual mortgage.

The total cost of bank fees can range from 500 to 1,300 euros. And the mutual registration with mortgage, at Casa Pronta, has a value of 700 euros.

Therefore, be prepared to pay this amount to the bank, along with the costs mentioned above.

I already have the key in hand, and now?

After making your savings available to pay all the mentioned amounts, remember that being a property owner also has costs.

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

The condominium fee depends on the building and its location, averaging 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 for urban buildings, and up to 0.8% of the VPT for rustic buildings.

IMI can be paid in one installment, or in installments. It depends on the owner's preference and the amount to be settled. That is:

• 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 amount to pay exceeding 500 euros and wants to settle it in a single installment, they can also do so.

So, even though you have the key to your new dream home in hand, you should always set aside a portion of your budget for these costs.

As a complex process, ensure personalized assistance from a credit intermediary Poupança no Minuto for your housing credit. It guarantees a quick, assertive, and free response. And it also clarifies all your doubts, about the costs of the process or others.