Last Updated on January 6, 2025 by Laila Oliveira
As global interest rates rise, many expats face increasing challenges in financing property purchases. With borrowing costs climbing in the U.S. and across Europe, Portugal stands out as a unique opportunity for those seeking affordable mortgages, stable investment options, and long-term financial advantages. Despite the rising interest rates, is Portugal still the best option for expats seeking mortgages?
In this article, we explore why Portugal remains an attractive destination for expats and how experts like Viv Europe and Spreadhunters can simplify your journey to property ownership. Let’s get started!
The Global Impact of Rising Interest Rates
Central banks worldwide have been increasing interest rates to combat inflation, leading to higher borrowing costs for property buyers. In the U.S., mortgage rates often exceed 7%, making homeownership increasingly expensive.
In contrast, Portugal offers mortgage rates between 3% and 5%, which is a significant advantage for expat buyers.
Example: Let’s say you’re financing a €300,000 property. With a mortgage rate of 3.5% in Portugal, your total interest over 25 years would be around €147,000. At a rate of 7%, typical in the U.S., the interest jumps to over €315,000—more than double.
This stark contrast demonstrates how significantly lower rates in Portugal can impact your overall investment.
Why Portugal Stands Out in a Changing Market
Portugal’s property market offers a combination of affordability and stability, making it a preferred choice for expats. Here’s why:
- Competitive property prices: While prices in Lisbon and Porto are rising, they remain significantly lower than in cities like Paris, London, or New York.
- Tax benefits for expats: While the Non-Habitual Resident (NHR) regime was discontinued at the end of 2023, the Portuguese government is introducing the Incentivised Tax Status Program (ITS), which will come into effect in 2025.
- A safe and stable investment environment: Portugal’s strong political and economic stability continues to attract long-term investors.
How Viv Europe Helps: Viv Europe provides end-to-end relocation services, helping you navigate visa applications, find the perfect neighborhood, and settle into your new home with ease.
- Read Also: How To Get A House Mortgage In Portugal.
Flexible Mortgage Options for Expats
Portuguese banks are highly experienced in tailoring their mortgage offerings to international buyers. Here’s what you can expect:
- Loan-to-value ratios of up to 80% for non-residents, depending on your financial profile.
- Repayment terms range from 20 to 30 years, with options for fixed or variable rates tied to the Euribor.
- Currency flexibility: Some banks offer repayment options in euros or U.S. dollars, reducing the risk of exchange rate fluctuations.
Spreadhunters’ Advantage: As a trusted mortgage broker, Spreadhunters works directly with multiple banks to secure the best rates and terms for expats, saving you time and ensuring you get the most competitive deal.
Inflation and Real Estate as a Safe Haven
In times of global inflation, real estate has proven to be a reliable asset. Portugal’s property market, with its steady value growth and affordability, offers a hedge against inflation:
- Fixed-rate mortgages allow buyers to lock in predictable monthly payments, providing stability amid fluctuating costs.
- Properties in Portugal are seeing increasing demand, especially in coastal and rural areas, further boosting their investment potential.
Pro Tip: Acting now to secure favorable financing terms can protect you from potential future rate hikes. Spreadhunters can help you take advantage of current opportunities before conditions change.
Let’s Move to Europe
With Viv Europe your plans for Europe will come to a reality
Portugal’s Real Estate Trends
As Portugal’s property market evolves, expats have unique opportunities to capitalize on emerging trends:
- The rise of sustainable properties: Energy-efficient homes are becoming more popular, aligning with Portugal’s green initiatives and offering lower operating costs.
- Rising interest rates in secondary locations: Areas like the Algarve, Douro Valley, and smaller coastal towns are attracting remote workers and retirees seeking tranquility without sacrificing amenities.
- Rental income potential: Expats increasingly view their property purchases as dual investments, serving as both a home and a source of rental income during peak tourist seasons.
How Viv Europe and Spreadhunters Can Help: Whether you’re seeking a primary residence or an investment property, Viv Europe’s property search expertise and Spreadhunters’ financing solutions ensure you maximize your opportunities.
Why Timing Matters More Than Ever
In today’s rapidly changing financial climate, timing is critical. Delaying your purchase could mean higher borrowing costs or missed opportunities in a competitive market.
Secure Your Future in Portugal
Despite global rising interest rates and financial challenges, Portugal remains a standout destination for expats seeking affordable property and stable investment options.
With competitive mortgage rates, attractive property prices, and expert guidance from Viv Europe and Spreadhunters, your dream of owning a home in Portugal is within reach.
Next Steps:
Replay our latest webinar to gain valuable insights into Portugal’s property market, or book a free consultation with Spreadhunters to evaluate your financial capacity. Together, we’ll make your move to Portugal seamless and stress-free.
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’d like to book a free consultation with their experts, click here to see available timeslots!
