Nancy: In preparing for eventual residency, I've seen almost every YT video on PT. None ever mentioned this - so a big thanks. Retired at 67 soon and not asset-rich, I'll stop looking at possible apartments to buy (150K @ 8 years is ~$1800/mo). However, I might con one of my working kids to invest and just pay them rent! Thanks again.
Hi Gie: You raise a good option for some people and that is to put the home in the name of a younger relative. This of course extends the term of the loan.
A few additional notes: (1) Our bank offered us a mortgage that would cover us until we were 75; (2) however, we would also both be required to buy life insurance for the bank’s benefit; (3) we would also be required to buy insurance on the building for the bank’s benefit, and for an apartment in a larger building, the insurance covers the apartment as well as the percentage of the building that the apartment occupies. We were quoted an extremely low rate - only 1% above euribor, which is currently negative - BUT this was a floating rate, which is apparently the most common way of financing by far in Portugal. The only thing that our bank could offer that was close to a fixed rate was essentially a 10/1 ARM, and the base rate was a few percent higher. Bottom line: with the insurances (for middle aged folks) and fees included, the cheapest floating rate mortgage was equivalent to about 4-4.5% interest, and the 10/1 ARM analog started out at an equivalent to about 6-6.5% interest.
Thanks for the timely response. Inflationary trends had begun before the tragic events in Ukraine. Unfortunately, rates are likely to rise further. I worry about the ,many Portuguese that have adjustable rate mortgages.
Yep - euribor is still negative, but it’s hard to see that continuing for long. Euribor has been negative for about 6 years and sub-2% since the 2008 crash. People taking out mortgages have gotten used to that, so if the interest rates increased much, it would probably be a bit of a shock to the system for many homeowners here.
The bankers and realtors I have consulted for this post explained that 75 would likely be the age soon. But today it was best to make calculations baed on age 70.
Appreciate how thoroughly and clearly you presented this information. I wish that everyone considering moving to and buying in Portugal would read this, as it addresses the most important and basic considerations. Thank you, yet again, for your work!
Nancy: In preparing for eventual residency, I've seen almost every YT video on PT. None ever mentioned this - so a big thanks. Retired at 67 soon and not asset-rich, I'll stop looking at possible apartments to buy (150K @ 8 years is ~$1800/mo). However, I might con one of my working kids to invest and just pay them rent! Thanks again.
Hi Gie: You raise a good option for some people and that is to put the home in the name of a younger relative. This of course extends the term of the loan.
A few additional notes: (1) Our bank offered us a mortgage that would cover us until we were 75; (2) however, we would also both be required to buy life insurance for the bank’s benefit; (3) we would also be required to buy insurance on the building for the bank’s benefit, and for an apartment in a larger building, the insurance covers the apartment as well as the percentage of the building that the apartment occupies. We were quoted an extremely low rate - only 1% above euribor, which is currently negative - BUT this was a floating rate, which is apparently the most common way of financing by far in Portugal. The only thing that our bank could offer that was close to a fixed rate was essentially a 10/1 ARM, and the base rate was a few percent higher. Bottom line: with the insurances (for middle aged folks) and fees included, the cheapest floating rate mortgage was equivalent to about 4-4.5% interest, and the 10/1 ARM analog started out at an equivalent to about 6-6.5% interest.
Thanks for the timely response. Inflationary trends had begun before the tragic events in Ukraine. Unfortunately, rates are likely to rise further. I worry about the ,many Portuguese that have adjustable rate mortgages.
Yep - euribor is still negative, but it’s hard to see that continuing for long. Euribor has been negative for about 6 years and sub-2% since the 2008 crash. People taking out mortgages have gotten used to that, so if the interest rates increased much, it would probably be a bit of a shock to the system for many homeowners here.
It’s actually 75 in Portugal. At least by the banks I’ve contacted so far.
The bankers and realtors I have consulted for this post explained that 75 would likely be the age soon. But today it was best to make calculations baed on age 70.
And also may require life insurance. Which can add a hefty premium…
Yes, especially if extended beyond 70.
Appreciate how thoroughly and clearly you presented this information. I wish that everyone considering moving to and buying in Portugal would read this, as it addresses the most important and basic considerations. Thank you, yet again, for your work!
De nada