How long does mortgage approval take?

It depends mostly on how complete the file is. With the paperwork in order, the decision about the borrower is usually quick; what stretches the timeline is the valuation, the registry checks and requests for missing documents. Expect two separate steps: approval of an amount, which can be done before choosing a property, and final approval tied to the specific home, which only starts once you find it. Gathering everything before submitting is the most effective way to shorten it.

Will the bank lend 100% of the property value?

As a rule, no. The bank finances a percentage of the lower of purchase price and appraised value, and that percentage is capped under the Banco de Portugal macroprudential recommendation, more tightly for a second home than for a main residence. The difference is your deposit, paid from your own funds. On top of that come IMT, stamp duty, the deed and registrations, which are also not financed. Check the percentage in force on the Banco de Portugal website and the actual amount in your bank's offer.

The bank's valuation came in below the price. What happens?

The bank recalculates the loan on the appraised value, the lower of the two, and the financed amount falls. The gap has to be covered from your own funds. There are three routes: renegotiate the price with the seller using the report as leverage, challenge the valuation with the bank if there is a factual error such as wrongly recorded areas or layout, or seek a second valuation at another lender. If none works and you have already signed a CPCV with no financing clause, your deposit is at risk.

Fixed or variable rate: which should I choose?

The right question is not which turns out cheaper, since that is only known at the end. It is how much payment variation your budget can take. If a significant rise in the instalment would cause real strain, a fixed or mixed rate buys predictability and that cost is justified. If there is slack, variable tends to carry a more competitive spread and a lower early repayment fee, which matters if you plan to overpay or sell within a few years. Always compare on TAEG, and ask more than one bank for the same simulation.

Can I switch banks after my mortgage is approved?

Yes. An approval commits you to nothing until the contract is signed, and running offers from several banks in parallel is standard practice. Compare using each bank's FINE side by side, looking at the TAEG and the bundled products, not just the spread. After completion you can still move the loan to another lender, but then the cost of releasing the old mortgage, a new registration and a new valuation all weigh on the maths.

The buyer's guide

How a mortgage works in Portugal

A Portuguese mortgage works in three stages: the bank assesses the borrower first, then the property, and only then lends. In practice, it reviews income, existing debt and credit history to set a maximum amount, a term and a rate; it commissions a valuation and finances a percentage of the lower of the purchase price and the appraised value; and everything is formalised at the deed, where the money goes to the seller and a mortgage is registered over the property in the bank's favour. Between approval and deed there are expiry dates, a mandatory reflection period and documents to gather. Which is why the order matters: a buyer who reaches the market with credit already approved negotiates with a date and a figure, not an intention.

The three stages: approval, valuation, deed

The first stage is about the buyer. You give the bank identification, proof of income, tax returns, bank statements and the Banco de Portugal credit liabilities report. On that basis the bank issues an approval setting out a maximum amount, a term, a rate and any conditions attached. This approval is not yet tied to any specific property.\n\nThe second stage is about the property. Once a home is chosen, the bank sends a surveyor and then works with two numbers: the agreed price and the appraised value. This is also when it reviews the property's registry and tax position, through the certidão permanente and the caderneta predial, and checks that there is a licença de utilização and an energy certificate.\n\nThe third stage is formalisation. The loan documents are signed, the mortgage is registered in the bank's favour, and the deed takes place, where the financed amount is released to the seller. Repayments then begin, usually by direct debit from the account held with the lender.

What the bank assesses about you

Three things weigh more than anything else: capacity to pay, income stability, and past credit behaviour. Capacity is measured by the taxa de esforço, which compares total monthly credit instalments against the household's net income. It is not only the mortgage payment that counts: car loans, personal loans, credit cards with a drawn limit and current rent all go into the calculation.\n\nIncome stability explains why two households on the same salary get different answers. A permanent contract, time in the job and a long relationship with the bank all help. Self-employment, variable income or income earned abroad do not block a mortgage, but they require more documented history, usually several years of tax returns.\n\nCredit history is the strictest filter. Incidents recorded in the Banco de Portugal credit register, even old ones already settled, will need explaining. It is worth requesting your own credit liabilities report before approaching a bank, so you know what it will see. Finally, the term is capped by age: maturity is shortened so the loan ends before a maximum age set by each bank, within the Banco de Portugal macroprudential recommendation.

The valuation, and how much the bank actually lends

The bank does not finance a percentage of the price. It finances a percentage of the lower of the purchase price and the appraised value. That single sentence causes most of the surprises. If the valuation comes in below the agreed price, the loan amount drops and the shortfall becomes the buyer's own money, on top of the deposit already planned for.\n\nThat percentage, the ratio of loan to security value, is not the bank's free choice. Banco de Portugal issues a macroprudential recommendation setting limits on the loan-to-value ratio, on affordability and on the average maturity of new lending, and it treats a main home differently from a second home or a buy-to-let. The figures in force are published on the Banco de Portugal website and that is where they should be checked, not in a table copied from a blog.\n\nThe valuation is paid for by the buyer and has an expiry date. If the process drags on, it may have to be repeated. If the report flags defects, or a mismatch between registered and actual area, the bank can make the loan conditional on that being resolved. Reading the valuation report, and not just the final number, is one of the most useful things a buyer can do.

Fixed, variable or mixed rate

On a variable rate, the instalment rests on two parts: an index, almost always 3, 6 or 12 month Euribor, and a spread, which is the bank's margin and stays fixed for the life of the loan. Together they form the TAN. The index resets at the end of each period, so the instalment moves up and down. The index term sets the reset frequency: 12 months changes once a year, 3 months changes four times.\n\nOn a fixed rate, the TAN stays put for a contracted period, which may be part or all of the term. You pay for predictability and, as a rule, you pay slightly more at the start. A mixed rate combines the two: fixed for the first years, variable thereafter. Choosing between them is not a bet on Euribor, it is a decision about how much payment variation the household budget can absorb without strain.\n\nTwo practical consequences get forgotten. First, the early repayment fee differs by rate type, is capped by law, and is heavier on fixed than on variable. Anyone planning to overpay early, or to sell within a few years, should do that sum before choosing. Second, the spread offered almost always depends on taking associated products: salary domiciliation, insurance, cards. The bank is required to also show the cost without them. Compare the TAEG of both versions, because it is the TAEG, not the spread, that absorbs fees and insurance.

What it costs, beyond the interest

The loan has costs of its own, on top of the purchase costs and not to be confused with them. On the loan side: the valuation fee, arrangement or processing fees charged by the bank, stamp duty on the loan amount at a rate that depends on the term, stamp duty on the interest in every instalment, registration of the mortgage, and the required insurance.\n\nThere are two insurances and they are not the same thing. Buildings insurance covers the structure and is required by the bank for as long as the mortgage exists; in buildings held in propriedade horizontal, fire cover is required by law. Mortgage life cover is not a legal requirement, but banks require it in practice and tie it to the spread. In both cases you have the right to insure elsewhere provided cover is equivalent, and switching often pays off after a few years.\n\nOn the purchase side sit IMT, stamp duty on the transfer, the deed and the registrations. Those are covered in another article, but the cash rule is simple: none of them is financed. All of it comes out of your own money on or before completion day. Ask the bank for the FINE, the standard European information sheet, which consolidates rate, TAEG, instalment, fees and insurance in one document and lets you compare offers from different banks side by side.

From approval to deed: the deadlines that matter

The approval has an expiry date and so does the valuation. They are separate deadlines and one often lapses before the other, forcing documents to be refreshed or a new valuation to be paid for. There is also a mandatory minimum reflection period between delivery of the FINE with the approved terms and signing the contract. That period is stated on the sheet itself and cannot be waived, so it has to be built into the completion date.\n\nThe CPCV is where these deadlines stop being administrative detail. The promissory contract fixes the deadline for the deed, and if that date is tight against the bank's timetable the buyer carries the risk. Anyone signing a CPCV before the mortgage is approved should insist on a clause that expressly covers the possibility that financing is not granted on the expected terms, otherwise the deposit is exposed.\n\nIn the final stretch, three checks prevent a same-day postponement: that funds for IMT, stamp duty, deed and registrations are in place and the taxes paid before the act; that the bank has issued the payment instruments and the provisional registration of purchase and mortgage has been requested; and, where the seller has a mortgage on the property, that the distrate has been arranged with their bank, because the property must reach the deed free of charges. That stretch, from approval to keys, is what Stonest Partners handles on the buyer's side, at no cost to the buyer, since the mediation commission is paid by the selling side.

Common questions

How long does mortgage approval take?: It depends mostly on how complete the file is. With the paperwork in order, the decision about the borrower is usually quick; what stretches the timeline is the valuation, the registry checks and requests for missing documents. Expect two separate steps: approval of an amount, which can be done before choosing a property, and final approval tied to the specific home, which only starts once you find it. Gathering everything before submitting is the most effective way to shorten it.
Will the bank lend 100% of the property value?: As a rule, no. The bank finances a percentage of the lower of purchase price and appraised value, and that percentage is capped under the Banco de Portugal macroprudential recommendation, more tightly for a second home than for a main residence. The difference is your deposit, paid from your own funds. On top of that come IMT, stamp duty, the deed and registrations, which are also not financed. Check the percentage in force on the Banco de Portugal website and the actual amount in your bank's offer.
The bank's valuation came in below the price. What happens?: The bank recalculates the loan on the appraised value, the lower of the two, and the financed amount falls. The gap has to be covered from your own funds. There are three routes: renegotiate the price with the seller using the report as leverage, challenge the valuation with the bank if there is a factual error such as wrongly recorded areas or layout, or seek a second valuation at another lender. If none works and you have already signed a CPCV with no financing clause, your deposit is at risk.
Fixed or variable rate: which should I choose?: The right question is not which turns out cheaper, since that is only known at the end. It is how much payment variation your budget can take. If a significant rise in the instalment would cause real strain, a fixed or mixed rate buys predictability and that cost is justified. If there is slack, variable tends to carry a more competitive spread and a lower early repayment fee, which matters if you plan to overpay or sell within a few years. Always compare on TAEG, and ask more than one bank for the same simulation.
Can I switch banks after my mortgage is approved?: Yes. An approval commits you to nothing until the contract is signed, and running offers from several banks in parallel is standard practice. Compare using each bank's FINE side by side, looking at the TAEG and the bundled products, not just the spread. After completion you can still move the loan to another lender, but then the cost of releasing the old mortgage, a new registration and a new valuation all weigh on the maths.

Where to check the figures

We do not publish tax tables or percentages: they change with each state budget, and an out-of-date number on an agency's own site is a problem rather than a typo. The sources above carry the current value.

Reviewed 2026-07-27