If you own a property in Portugal, transferring your mortgage to another bank is an operation that can help you save some money and get better bank financing conditions. But before you take this step, it is important to take into account a number of factors in order to make the change in an informed way. You have to look at the expenses related to transferring your mortgage from one bank to another, analyse various offers and remember that there are other things to take into account, as well as the interest rate. Check out these 5 tips for transferring your mortgage to another bank in Portugal.
Check the costs associated with transferring your mortgage
The first thing to bear in mind is that, in Portugal, transferring your mortgage to another bank means paying off your current loan and formalising a new one. And here we must consider the associated expenses, such as the commission on early repayment of the loan and the costs of formalising a new mortgage loan.
Focusing on the early repayment commission of the mortgage loan, bear in mind that the values change depending on the contracted interest rate, with the maximum values foreseen by law in Portugal being the following:
- Variable rate mortgages: the maximum commission is 0.5%
- Fixed rate mortgages: maximum commission is 2%
How will you know how much commission for early repayment of the loan you will pay? It will depend on what is stipulated in your mortgage contract. To find out, the best thing is to analyse the contract and check how much commission you will pay as this is different for each Portuguese bank.
It is worth noting that "there are currently banks that have a credit transfer campaign, in which they support the costs of the loan settlement and the formalisation of the new one, so the client can transfer the mortgage to another bank at no cost", says Miguel Cabrita, responsible for idealista/créditohabitação in Portugal.
Transferring your mortgage during the initial years of the loan
When can a mortgage be transferred to another bank? Generally, there is an initial period that varies from one loan to another. But after this period, the mortgage can be transferred at any time. If what you want is to save money, the most advisable is to transfer the mortgage to another bank during the initial years of the loan (preferably before you have paid off half of the capital).
Why is this? Because in most home loans in Portugal the "French amortisation system" is used. This means that in the first years, you pay more interest than capital. In other words, if you change the mortgage to another bank in the first years of the loan, you can save more money if you find a better offer than the one you already have because you will pay the same in terms of capital (the money the bank lends), but less interest.
Don't just look at the new spread
The mortgage spread (a fixed percentage of interest which the bank charges us for lending us its money) associated with the new mortgage is one of the factors to take into account. This is the bank's profit when it grants the loan, so a smaller spread means you pay less interest.
But when you're making a mortgage transfer (although it's interesting to look for a lower spread), you shouldn't just look at the spread associated with the new loan. It's also important to take into account the years of loan repayment (more years, means more interest), as well as the commissions associated with the loan or associated products that subsidise the interest, such as insurance.
In other words, although the spread is an important component that you should take into account when comparing different home loans, it should not be the only element to be taken into consideration.
Evaluate your bank's mortgage offer
As soon as you ask to transfer your mortgage to another bank in Portugal, it is common that the bank will make a counteroffer. In many cases, this offer may not be interesting. But there are cases when it is.
In other words, you should not reject this counteroffer without evaluating it. The most advisable thing is to read it carefully, evaluate the pros and cons and negotiate with the bank to see if you can change anything. And finally, with the two offers on the table, you can compare them and choose the most profitable and attractive one.
Compare several mortgages
Before you transfer your mortgage to another bank, you should compare several banks' offers. By comparing mortgage loans you will find a solution that offers the best conditions for you. And so this is an essential step to optimise the profitability of the home credit transfer.
The most advisable thing is to compare different products and to do it between different banks as well. This process can be long, but it is important to do it to maximise savings. Note that you can always choose to hire the services of a credit intermediary or use an online mortgage comparison service such as idealista to make your life easier.
Wildfire victims in Portugal to receive free legal support
The Portuguese Bar Association has launched a solidarity initiative to lessen the impact of rural wildfires and support victims across the country. A pool of around 500 volunteer lawyers will provide free legal assistance to citizens and businesses severely affected by the blazes.
The real cost of buying property in Portugal in 2025: a guide for foreigners
Are you considering moving to Portugal and buying a property in 2025? Whether you’re looking for a permanent home, a holiday retreat, or an investment opportunity, it’s essential to understand the full cost of buying property in Portugal — beyond just the asking price. From taxes and legal fees to mortgage conditions, this guide breaks down everything you need to know about property purchasing costs for foreigners in 2025. This is the real cost of buying property in Portugal.
Inside Nicole Kidman’s reported move to Portugal
Australian actress Nicole Kidman is reportedly leaving Hollywood for Portugal and has already applied for residency in the country.
What is TAEG in Portugal? Understanding mortgage costs for foreign buyers
If you’re planning to buy property in Portugal, you’ve likely come across the term TAEG while researching mortgages. But what exactly does it mean, and why is it important for you as a foreign buyer?
Getting a mortgage in Portugal as a foreigner: a complete guide
If you’re considering buying property in Portugal, understanding how to get a mortgage as a foreigner is crucial. Portugal’s appealing climate, affordable living costs, and attractive property market have made it a hotspot for expats and international buyers. This comprehensive guide covers everything you need to know about getting a mortgage in Portugal as a non-resident, from eligibility requirements to the application process and associated costs.
IMI Portugal 2025: what foreign residents and homeowners need to know
The Municipal Property Tax (IMI) is an annual tax charged by Portuguese councils on property owners, including foreign residents who own property in Portugal. This tax is based on the property’s taxable value (VPT) and applies to both rural and urban properties. The amount paid helps to fund local services and infrastructure across the country.
Who’s who in the new Portuguese Government? From ministers to secretaries of state
The 16 ministers forming the 25th Constitutional Government led by Luís Montenegro were sworn in on Thursday, 5 June, during a ceremony presided over by the President of the Republic, Marcelo Rebelo de Sousa, at the Palácio da Ajuda in Lisbon. However, the government’s full composition was only completed after the 43 Secretaries of State took office on Friday, 6 June. These are the key figures who will govern Portugal over the next four years.