Second Home Savings


Abode2 spoke to real estate agency, Ideal Homes Portugal, about helping source the best deals for their Portuguese property mortgages in 2022. The firm is currently achieving an average rate of between 0.7% and 0.8% for clients buying homes in Portugal. In some cases, this rate has dipped as low as 0.47%.

Jose Mendonça, Mortgage Advisor at Ideal Homes Portugal explains: “This is an excellent time for individuals looking to buy property in Portugal at low interest rates. We expect these rates to be available for the next few years. Provided the Euribor – the European Central Bank Rate – remains in a negative state, we will have rates under 1%.”

The Ideal Homes Portugal team has provided its top tips for clients seeking to get the best rate for their property purchase in 2022. First and foremost is using a local contact with their ‘ear to the ground,’ who can quickly provide details of the kinds of mortgages and rates available. The firm recommends variable rate mortgages, which can be changed to a fixed rate at any time during the term of the mortgage if desired, at no extra cost to the borrower.

As is the case in the UK, borrowers with larger deposits tend to enjoy more favourable terms, as do those borrowing larger amounts. Excellent news for those looking for ultra-luxurious villas like this 11-bedroom villa in Silves, complete with indoor and outdoor pools, spa, home cinema and tennis court.

According to the Ideal Homes Portugal team, the longer the mortgage payment period, the easier it becomes to obtain rates as low as 0.5% and 0.6%. As such, the team recommends that older buyers consider the option of placing the mortgage in a child’s name, to increase the period and thus lower the monthly instalment.

Jose continued: “I work with clients during the mortgage pre-approval stage, to provide them with an idea of interest rates, duration and monthly instalments. I’ve seen clients achieve significant savings by working with their children to buy a holiday home – often one which the children are going to use anyway and are eager to be a part of.”

The team’s other tip is for individuals buying life insurance in Portugal to avoid doing so directly with the banks, even as part of a mortgage deal. Doing so can be far more expensive than buying the insurance through an independent broker.

After the trials and tribulations of the past two years, many families have reassessed their priorities and sought out second homes in the sun. Easily accessible from the UK, in the same time zone and hugely welcoming to remote workers, Portugal ticks all the right boxes, with its southern Algarve region delivering 300 days of sunshine per year.


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