Mortgage payment

Portugal uses French amortisation: the payment is level for the whole term, but its composition is not. Early on, most of what you pay is interest and only a thin slice is capital. As the outstanding balance falls, the interest falls with it and the capital slice grows.

One consequence catches people out: in the first years the balance barely moves. Anyone selling five years after buying often finds they owe the bank nearly as much as on day one.

Lengthening the term lowers the payment and raises the total interest considerably. Shortening it does the reverse. That is the only real trade-off in this calculation, and the simulator shows it as soon as you change the number of years.

The second line of the result is not an alternative scenario. It is the figure the bank actually decides on, and it is worth explaining where it comes from, because nothing about it is obvious from outside Portugal.

The Banco de Portugal is the country's central bank and its banking regulator. It does not set the rate your bank offers, but it does set the rules banks must follow when assessing whether a borrower can afford a loan. Those rules take the form of a macroprudential recommendation, addressed to the institutions rather than to borrowers, which they must either comply with or explain.

Two things in that recommendation shape the second figure. First, the payment is not tested at the contract rate: it is tested at a stressed rate, higher by one, two or three percentage points depending on the length of the loan, so the bank can see whether you would still cope if rates rose. Second, the resulting payment is set against your income as a ratio, the debt service-to-income ratio, and that ratio is expected to stay at or below 45%.

That 45% figure is new and the date matters: it applies to assessments made from August 2026, replacing a limit of 50% that had stood since 2018. Almost every English-language guide to Portuguese mortgages still quotes the old number. The recommendation also allows up to 10% of each institution's lending in any half-year to sit above the limit, so exceeding it is not automatically fatal.

Maximum terms changed at the same time and now turn only on age: 40 years for borrowers aged 35 or under and 35 years above that.

It does not compare banks, does not publish market rates to negotiate with and does not suggest you move institution. That is credit intermediation, a regulated activity and not ours. What is here is the arithmetic of a loan and nothing else.

The rate that appears pre-filled is the average on new lending published by the Banco de Portugal for June 2026, and it is there only so the page opens with a result. It is neither a recommendation nor a forecast: the rate that matters is the one your bank offers you, and that is the one to enter.

The calculation treats the rate as fixed for the whole term. Most Portuguese mortgages are variable or mixed, meaning an initial fixed period followed by a rate tied to Euribor, and on those the payment changes at each review. The figure here holds for as long as the rate does.

Note also that non-resident buyers face a separate consideration on the purchase itself, not on the loan: a flat rate of IMT that the purchase tax simulator covers.

The figures in use are reviewed regularly. The tax year in force is 2026.