Skip to main content
ONLINE SECURITY:
Spreads mais competitivos
Login
Open account
Login
Open account

Home Buying Guide

Everything you need to make this major investment easier and more effective. 

How to Choose the Right Property to Invest In?

Choosing the right home is one of the most complex parts of the process, but it is also the most important. This decision will shape your future, your memories and experiences, and those of your family. Every detail can matter, and many factors influence this choice.

To make the process easier, start by creating a checklist like the one below, adding any other aspects that are important to you. Compare different areas using this checklist to determine which location best meets your needs and requirements.

Run a simulation about how much you can afford to repay each month, complete your Mortgage simulation and submit your application online or at a Branch. 

  • Location

    A good location can make all the difference. It can increase the value of your property and improve your quality of life according to your preferences.

    Consider:

    • Public transport

    • Public parking

    • Traffic

    • Essential services (supermarkets, pharmacies, hospitals)

    • Restaurants and cafés

    • Distance to key destinations (workplace, schools)

    • Neighbourhood

    • Area safety

    • Pollution and noise levels

  • Future Development

    Don't forget to research the future plans for the area. Small changes can have a significant impact. Request the Urban Development Plan and Municipal Master Plan from the local authority and check whether any future developments may affect your property, such as access routes, views, roads or parking facilities. 

  • A casa

    The Property

    Beyond the number and type of rooms you need, there are several other factors to assess, both inside and outside the property:

    • Garage access

    • Security and vulnerability to break-ins

    • Plumbing

    • Damp and moisture

    • Existing equipment and fittings

    • Gross area versus usable area, considering family growth and long-term plans

    • Condominium charges, common areas and associated costs

    • Construction quality, materials and installations

    • Energy efficiency

    • Sun exposure

    • Top-floor and ground-floor properties, which may be more susceptible to damp and infiltration

       

    If the property has already been occupied, also check:

    • Pre-emption rights (municipality, heirs, tenants)

    • State of repair

    • Plumbing

    • Permissions for alterations

    • Planned works that may involve additional costs

  • Choosing the Right Financing Solution

    Selecting the right bank is just as important as choosing the right property. Review and compare the financing proposals available and assess which best suits your circumstances.

    Compare:

    • Mortgage type

    • Interest rates and spreads (Nominal Annual Rate and APR)

    • Terms and LTV (maximum financing ratio)

    • Associated fees and taxes

    • Insurance requirements

    • Repayment and early repayment options

    • Guarantees and guarantors

Understanding the Key Concepts

 

Mortgage Types

Different mortgage types are available for different purposes and therefore come with different conditions. Main categories include:

  • Main residence

  • Second home

  • Buy-to-let property

  • Land for construction of a main residence

  • Garage

  • Storage unit

  • Land not eligible for a Mortgage

  • Bridging finance

  • Other mortgage-backed credit facilities

 
Fixed Interest Rate

A fixed rate provides stability and certainty. Your repayments remain unchanged throughout the selected fixed-rate period or the entire loan term. You always know how much you will pay and are not affected by market fluctuations.

Variable Interest Rate

A variable rate usually offers lower initial repayments than a fixed rate. Repayments vary throughout the term according to the reference index, typically the 12-month Euribor. This means repayments are reviewed every 12 months and may increase or decrease.

Mixed Interest Rate

A mixed rate allows you to begin your Mortgage with a fixed rate period (2, 3, 4, 5, 10, 15, 20, 25 or 30 years) and then switch to a variable rate. During the fixed period, repayments remain unchanged. Afterwards, repayments will vary according to market rates.

Spread

The bank-defined component of the interest rate. It varies according to the amount financed relative to the value of the property, the mortgage type and the applicant’s profile.

Nominal Annual Rate (TAN)

The Nominal Annual Rate is obtained by adding the spread to the reference index. It is charged through monthly repayments and does not include fees or taxes.

Annual Percentage Rate of Charge (TAEG)

The APR reflects the overall cost of the Mortgage. It includes repayments of capital, interest, commissions, fees and other recurring charges related to the loan. 

Mortgage Online Platform

Apply for Your Mortgage Online

1

Simulate

There are many options available and you'll find the one that suits you best. Run a simulation, save it and submit it whenever you are ready.

2

Obtain a Preliminary Assessment

Find out immediately whether you are eligible to proceed and obtain confirmation.

3

Submit Your Application

Submit your Mortgage application and supporting documents online.

4

Completion

Track your application status online. You will only need to visit a Branch to complete the deed process. 

Mortgage Online Platform

More than a simulator, this platform allows you to submit your Mortgage application, upload documents and track the entire process through to completion. Everything is managed online.

Process Stages

1) Simulation

g

1) Simulation

2) Proposal 

g

2) Proposal 

3) Valuation

Abertura conta online

3) Valuation

4) Decision

g

4) Decision

5) Technical Assessment

5) Technical Assessment

6) Contracting

6) Contracting

7) Deed Completion

7) Deed Completion

Costs may include:

Costs may include:

  • Initial fees (opening, application review, valuation, contracting, etc.)

  • Choice of interest rate type, spread and reference index or fixed rate
  • Monthly insurance premiums

 

Life Insurance

The premium is based on the age of the borrower(s), the outstanding balance and the risk profile of the transaction. Cover generally includes death and permanent disability resulting from illness or accident.

Home Insurance

This policy may cover the building, contents, both, or a property under construction. Cover is based on the reconstruction value. Premiums are calculated according to the size of the property, chosen cover and geographical location.

Additional costs may include:

  • Repayment processing fees

  • Early repayment and full settlement charges

  • Other banking products and services contracted to obtain a reduced spread  

Required Documentation

Mandatory Documentation

  • Online Land Registry Certificate

  • Property Tax Registration Document or Model 1

  • Occupancy Licence or equivalent supporting documentation

  • Final Energy Performance Certificate

  • Identification documents for all parties involved (Citizen Card, passport, Tax Identification Number, powers of attorney, company certificates, minutes, etc.)

Additional Documentation (where applicable)

  • Property Technical File

  • Infrastructure Certificate 

  • Evidence relating to pre-emption rights

  • Birth certificates

  • Marriage certificates

  • Certificate confirming increase in co-owners 

  • Address certification document

  • Mortgage release document or SWIFT confirmation

Tax and Legal Charges and Obligations

IMT - Property Transfer Tax

  • Payable before completion

  • Calculated at rates between 0% and 6%, depending on the municipality

  • Applied to the higher of: 

  • The purchase price stated in the contract

  • The property's taxable value

IMI - Municipal Property Tax

  • Annual tax on property ownership

  • Current rates: 

  • Rural properties: 0.80%

  • Urban properties: 0.30% to 0.50%

  • A temporary exemption may apply to qualifying owner-occupied urban properties up to the applicable thresholds

     

Stamp Duty

  • Property transfers are subject to Stamp Duty at 0.80% of the transaction value stated in the deed, whether acquired by purchase, gift or inheritance.

 

Notary and Registration Fees

  • Registration fees are payable when provisional registrations are requested.

  • Notarial fees are payable on completion of the purchase and mortgage deed.

 

Capital Gains on Property Sales

The calculation of capital gains generally takes into account:

  • Sale value adjusted by the applicable depreciation coefficient

  • Costs associated with the purchase and sale

  • Property improvement costs incurred within the previous five years

 

Property Pre-emption Rights - Law 89/2021

This legislation introduced procedures applicable to mortgage-backed property purchases and properties transferred in lieu of payment.

For residential properties located in designated urban pressure zones or housing programme areas, buyers must provide evidence that a legal pre-emption notice was published through Casa Pronta / Predial Online, or provide the relevant access code.

If the required evidence is not provided, completion of the Mortgage process must be refused until the documentation is supplied. 

Benefits of Buying a Home

  • Building long-term wealth as repayments reduce your debt and ultimately leave you owning the property

  • Investment potential

  • Greater stability for individuals and families

  • Potential long-term property appreciation

Before making this investment, you should:

  • Build savings for the deposit

  • Study the property market and monitor changes carefully

  • Consider your debt-service ratio, which represents the percentage of household net income used to repay existing credit commitments

PUB | NOVO BANCO S.A. | Registered no. 7 at Banco de Portugal