How much does it cost to get a mortgage?

Housing credit: Bank financing is not 100% complete.

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

Currently, there are limits on housing credit financing imposed 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, banks are allowed to lend up to 80% of the value. Financing for 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, keep in mind that you will need to have available capital equivalent 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 is appraised at 180 thousand euros, the percentage will be 10% of the appraisal value (in this case, 18 thousand euros).  

But also, there are other costs associated with credit, which we will see next.  

You have to pay two taxes at the deed.

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

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

On the other hand, IMT must be paid on the highest value, between the property acquisition value and the Tax Asset Value (VPT), found in the property booklet. The value of this tax also depends on factors such as the applicable rate, 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 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.

Banks charge processing fees.

Afterwards, along with the initial capital to be made available 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 mortgage.

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

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

I already have the key in my hand, what now?  

After making your savings available to pay all the mentioned values, remember that owning a property also has costs.

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

The condominium fee depends on the building and its location, averaging around 30 euros per month.

Regarding 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.

Property tax can be paid in a single payment or in installments. It depends on the preference of the owner and the amount to be paid. 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 payment amount of over 500 euros and wants to settle it in a single installment, it can also be done.

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

Because it is a complex process, ensure personalized monitoring by a credit intermediary Savings in a Minute in your home loan. Guarantee a quick, assertive, and free response. And also clarifies all your doubts about the costs of the process or others! Simulate directly here: