How much money do you need to buy a house in Portugal?

What savings are needed in different parts of Portugal to buy property and get a mortgage? We have the details.

Photo by Daniel Llorente on Unsplash
Photo by Daniel Llorente on Unsplash
8 April 2021, Redaction

Even during the coronavirus pandemic, many people still make buying property in Portugal a priority, and in the majority of cases, buyers also need a mortgage. Despite the crisis generated by COVID-19, banks in Portugal have remained willing to lend money for this purpose, although take note that they no longer provide 100 per cent financing. Therefore, to get the house you want in Portugal, you need to have some money to put down as a deposit, as well as have enough to cover other expenses associated with the purchase, namely taxes. The level of savings required also varies according to the area of the country where you want to buy a property. So, how much money do you need to buy a house in Portugal? An analysis by idealista, carried out in the middle of the pandemic crisis, shows how much money buyers need to buy property in the district capitals of mainland Portugal and the islands.

How much is needed to buy a house in Portuguese cities?

Lisbon, Faro, Porto and Funchal are, in this order, the cities in Portugal where the average price of the houses for sale is the highest, according to data from idealista/data and idealista/créditohabitação for the year 2020. Average prices stood at 503,837€, 364,449€ and 359,691€ and 328,169€, respectively. 

"It can be observed that property prices are higher in large cities and on the coast, where the biggest slice of their economic livelihood is tourism," point out the experts at idealista/data. 

In these same 4 district capital cities, to be able to get a mortgage, it is necessary to have the following funds available to pay the mortgage deposit: 87.000€, 60.000€, 59.000€ and 50.000€ respectively. 

In all the other district capital cities in Portugal, the average price of homes is below 300,000€, For example, in Beja (104,746€), Castelo Branco (108,394€) and Guarda (117,731€), the lowest house prices are recorded. In these same 3 regions, it is necessary to available savings of around 13,000€, 14,000€ and 15,000€ respectively before applying for a mortgage.

Analysis by typology

  • T0: studios

In an analysis by type, it can be seen, for example, that studio apartments are more expensive in Lisbon (265,203€), Faro (204,392€) and Évora (163,094€), and therefore, is reflected in the amount of money needed to pay a mortgage deposit, 41,000€  in the case of Lisbon. The most affordable studio apartments can be found in Portalegre (66,000€), Vila Real (€66,000) and Guarda (69,063€). In these cases, potential buyers will need to have around 9,000€ to make a down payment. 

  • T1: 1-bedroom properties

In the case of one-bedroom properties, the most expensive ones cost an average of 287,564€ in Lisbon, 181,001€ in Porto and 171,195€ in Faro in the Algarve, requiring funds of approximately 45,000€, 25,000€ and 24,000€, respectively. 

Similar to the situation with studios, it is in Guarda, Castelo Branco and Beja that it is necessary to have less money to buy a property (7,000€).

  • T2: 2-bedroom properties

Regarding 2-bedroom houses and apartments in Portugal, Castelo Branco and Bragança stand out as the district capitals where the amount of money needed to buy a house is, on average, the most accessible (8,000€).

On the other hand, Lisbon (65,000€), Porto (39,000€), Faro (33,000€) and Funchal (31,000€) are the least affordable. In these district capitals, buying a 2-bedroom apartment costs an average of 393,262€, 255,242€, 220,985€ and 223,639€. 

  • T3: 3-bedroom properties

When it comes to properties with 3 bedrooms, the funds required before going ahead with the financing process range from 13,000€ in Portalegre, where the average price of a home is 101,604€, to 104,000€ in Lisbon, where buying this type of poperty costs an average of 594,168€.

  • T4+: properties with 4 bedrooms or more

In order to buy a property in Portugal with 4 or more bedrooms (T4+), buyers will need to pay around 161,000€ when it comes to a mortgage deposit in Lisbon (the average house price is 922,390€) and 34,000€ in Porto (average house prices of 768,598€). Castelo Branco (159,014€) and Beja (161,260€) have the opposite, with average savings of 22,000€ needed to buy properties here.

Tips to bear in mind when looking for a mortgage in Portugal

Miguel Cabrita, the head of idealista/data Portugal, reminds us that when it comes to buying a property and applying for a mortgage, whether you're from Portugal or not, "it is important to know the minimum approximate funds that you may need to get a mortgage," which includes "the down payment on the loan, taxes and some expenses of the process, including IMT, Stamp Duty and registrations. 

"Except for bank-owned properties, the maximum financing from banks for the acquisition of permanent home ownership in Portugal will be 90% of the purchase value or property valuation, the lower of the 2, limits set by Banco de Portugal," he recalls.

"Regardless of where you're buying a property, in order to do so in Portugal and get a mortgage, it is necessary to set aside at least 7,000€, which would allow one to purchase of a 1-bedroom apartment in Beja, Castelo Branco or Guarda, the district capitals where average property prices are more affordable," adds Cabrita, stressing that with savings in the bank of around 20,000€, it will be difficult to buy a property in Lisbon, Porto or Faro. "The ranking is headed by Lisbon, where you need available funds of more than 40,000€ to buy a property, no matter what size it is. In Porto, buyers need at least 25,000€ in available funds, even if they are looking for a 1-bedroom apartment".

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