Last Updated on February 3, 2025 by Laila Oliveira
If you purchased property in Portugal over the past few years, either with a variable-rate mortgage or through a cash purchase, you may be missing out on a valuable financial opportunity. If you refinance or remortgage your property, it could help you reduce costs, lock in better rates, or fund new projects.
With property values rising and fixed mortgage rates remaining competitive, there has never been a better time to explore your options. Here’s why refinancing or remortgaging could be the smart financial move for you.
Refinancing: Reduce Your Costs and Lock in Stability
Refinancing allows you to replace your current mortgage with one that offers better terms, such as a lower interest rate or fixed-rate stability. For those with variable-rate mortgages, refinancing to a fixed rate provides long-term predictability and immediate savings.
Example:
If you currently have a €150,000 mortgage at a variable rate of 5.05%, your monthly payment is likely around €880. By refinancing to a fixed rate of 2.79%, your monthly payment could drop to approximately €690. Over 20 years, this would save you over €45,000 in interest alone.
The benefits of refinancing go beyond monthly savings—it offers peace of mind by shielding you from potential future rate increases.
Remortgaging: Unlock the Equity in Your Property
If your property’s value has increased since you purchased it, remortgaging can provide access to the equity tied up in your home. This equity can be used to fund various financial goals, including:
- Renovating your property.
- Investing in a second home or rental property.
- Starting a business or funding education.
Example:
Let’s say your property is now valued at €300,000, and your current mortgage balance is €90,000. By remortgaging with a loan-to-value (LTV) ratio of 70%, you could borrow up to €210,000, leaving €120,000 available for reinvestment or personal projects.
This approach allows you to leverage your property’s value without selling it, turning a static asset into a dynamic financial resource.
Who Should Refinance or Remortgage Their Property?
These strategies are ideal for:
- Variable-rate borrowers: If your current interest rate exceeds 4%, refinancing to a lower fixed rate can significantly reduce your costs.
- Cash buyers: If you purchased your property outright, remortgaging allows you to free up capital while maintaining ownership.
- Owners of appreciating properties: If your property’s value has risen, remortgaging can help you access funds tied up in equity for future projects.
Whether your goal is to lower monthly payments, secure stability, or fund a new venture, refinancing or remortgaging can be tailored to your needs.
Why Timing Matters
Acting now is crucial for two key reasons:
- Competitive fixed rates: Rates as low as 2.79% are still available, but they may not last as global interest rates continue to rise.
- Rising property values: Portugal’s property market has seen consistent growth, meaning the equity in your home may be at its peak potential.
Delaying your decision could result in higher borrowing costs or missed opportunities to capitalize on your property’s increased value.
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How Spreadhunters Can Help
Navigating the process to refinance or remortgage your property can be complex, but expert guidance makes all the difference. Here’s how Spreadhunters supports you:
- Market insights: We analyze the best rates and terms from multiple lenders, ensuring you secure the most competitive options.
- Customized solutions: Our team tailors refinancing and remortgaging strategies to meet your specific financial goals.
- Seamless process: From property evaluations to finalizing loan agreements, we handle the details so you can focus on your priorities.
Tip: Spreadhunters also offers free consultations to help you evaluate your refinancing or remortgaging potential with clarity and confidence.
Benefits Beyond Savings
Refinancing and remortgaging offer more than immediate financial relief. They also provide:
- Increased liquidity: Access funds for future projects without selling your property.
- Enhanced stability: Lock in predictable payments with fixed-rate financing.
- Strategic flexibility: Use your property’s value as leverage for long-term investments.
These benefits make refinance or remortgage a powerful tool for maximizing your financial potential in an ever-changing market.
Take Advantage of Portugal’s Opportunities Today
Refinancing or remortgaging your property in Portugal offers unmatched financial advantages. Whether you’re looking to reduce costs, secure stability, or fund a new project, rising property values and competitive fixed rates make now the time to act.
Next Steps:
Contact Spreadhunters today for a free consultation. Let us help you explore your options and create a plan to optimize your property’s value for years to come.
This article is part of our series with Spreadhunters, a team of qualified mortgage brokers who help expats make their dream of homeownership a reality. With a 100% success rate, they guarantee a safe experience throughout your journey of homeownership.
If you’re looking to relocate to Portugal but don’t know where to start, get in touch with our team of experts at Viv Europe! Learn info about visas, healthcare, taxes, and much more. See you soon!
