If you already own property in Portugal with an existing mortgage, remortgaging (transferência de crédito habitação) is a powerful tool — whether you want to reduce your monthly payments, lock in a better rate, release equity, or simply switch to a more competitive lender.
Why Remortgage in Portugal?
- Your current Euribor-indexed rate has made payments unaffordable and you want to switch to fixed
- Your property has increased in value, improving your LTV ratio and giving access to better rates
- You want to consolidate other debts into your mortgage
- Your financial situation has improved and you qualify for preferential terms
- You want to release equity for renovation or investment
The Process
Remortgaging in Portugal involves applying to a new lender (or renegotiating with your existing one), undergoing a new property valuation, and completing a transfer deed at the notary. The new bank pays off the old mortgage, and you begin repayments under the new terms.
Costs to Consider
Unlike purchasing, remortgaging does not trigger IMT. However, you will face stamp duty on the new mortgage (0.6%), new bank processing fees, property valuation costs, and notary/registry fees. Early repayment penalties from your existing lender may also apply — typically 0.5% for variable-rate loans and 2% for fixed-rate loans, plus 4% stamp duty on the fee.
When Does It Make Sense?
A remortgage typically makes financial sense if the savings in interest over the remaining loan term clearly outweigh the switching costs. A broker can calculate the break-even point and tell you whether the switch is worth making at current rates.
With rates having moved considerably over recent years, many Portuguese mortgage holders are sitting on unnecessarily expensive loans. A quick review could save you thousands annually.