If you bought a property with a mortgage in Portugal, you can rent it out

The possibility of renegotiating loan conditions in case you do not rent out your property any more has been eliminated, but some requirements need to be met.

Mari Helin/Unsplash
Mari Helin/Unsplash
28 November 2019, Redaction

Properties purchased in Portugal on credit can be rented out without restrictions and without the risk of worsening your mortgage conditions starting from 2020, provided that the rental contract mentions that there is a mortgage. Do you still have questions? Here are the rules you need to pay attention to.

With the amendment to the law, which came into force on 13th February this year, the possibility of renegotiation of loan conditions in case of lease was eliminated. However, there are some requirements that must be met, including the obligation to include “an express mention that the property is mortgaged in guarantee of a credit whose purpose is to finance the acquisition, performance of works or maintenance of property rights over the consumer's own permanent home" in the rental contract.

But there is more. It is also mandatory that "the tenant must deposit the rent in the bank account associated with the loan", according to the Portuguese news agency Lusa. "Non-compliance with any of these requirements allows the bank to start a process of reviewing the loan agreement", explains the lawyer José Gaspar Schwalbach to the news agency, admitting that the failure to mention that the property is mortgaged in a rental contract already signed can be overcome by making a correction.

Thus, instead of an addendum, a new contract is made, rectifying the previous one, which must make express reference to the date on which it begins to be concluded in order to protect the maintenance of the conditions of the bank loan. Mentioning the mortgage in the contract brings yet another advantage to the tenant, who is "warned" that they can be evicted if the property is sold by repossession if the owner defaults.

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