Mortgage lending in Portugal is expected to continue to rise in 2026, amidst high demand (especially from young people), a “competitive” banking offer, and stable interest rates. And there's a trend that will solidify this year: pre-approved mortgage loans. “Some clients are already seeking credit before looking for a house, which is essential,” emphasizes Miguel Cabrita, head of idealista/créditohabitação in Portugal, explaining that this way, families understand “what they can achieve” to match their property search to their financial reality, making home buying “much more peaceful and stable.”

This is one of the main pieces of advice that the head of the credit intermediary team at idealista in Portugal gives to those thinking about taking out a loan to buy a house in 2026. “First of all, seek credit approval to understand which property is feasible given your financial reality, especially since the decision to buy a house may have to be postponed due to the current situation (…) And then, it’s necessary to understand that the decision to buy a house is binding,” he explains.

“Mixed rates with shorter terms are priced very close to variable rates.”

Regarding the type of interest rate to choose, there is no single answer, as it depends on each family's financial situation. What is known today is that “mixed rates with shorter terms are priced very close to variable rates. Therefore, the decision ends up being inherent in the search for stability over two or three years, instead of being exposed to the variable,” says the expert, who anticipates a stabilization of Euribor rates (the main benchmark index in Portugal).

“The decision to opt for a mixed or fixed rate should be made from a financial perspective and not from an immediate perspective. (…) But people usually look at the installments they will have in the first month of the loan and not at the entire period or the 15-year term in which the credit is active. This should be analyzed,” he also recommends. In theory, those with lower salaries should “resort more to the fixed rate so as not to be exposed to Euribor fluctuations,” highlights Miguel Cabrita in this interview with idealista/news.

Applying for a mortgage in Portugal
Miguel Cabrita, head of idealista/mortgage loans in Portugal Credits: Gonçalo Lopes | idealista/news
How do you assess the performance of the mortgage market in Portugal in 2025?

2025 was a year of growth for mortgage lending, with demand that followed the evolution of recent years. Much of the demand is primarily focused on identifying the criteria and framework for the banking market's supply, which is also heavily influenced by unforeseen geopolitical events. But it was a fantastic year in terms of mortgage lending. And if we look at the historical level, we are perhaps at the highest level of the last ten years. Therefore, we have a vigorous mortgage market.

"About 50% of the demand we have for mortgages is within this [young] age range."

Did the incentives for young people up to 35 years old (public guarantee and ITBI exemption) help boost the sector?

Considerably. There are two major obstacles to mortgage lending for young people: savings, because they haven't had time to save, relying heavily on family support; and indebtedness, that is, the ability to meet monthly payments. Regarding indebtedness, young people cannot effectively overcome it because their incomes remain stable. But the issue of savings is overcome, because they don't have to pay taxes or can even access 100% financing. These measures have helped a lot in terms of demand. About 50% of the demand we have for mortgages is within this age range.

Of the mortgage demand they have, what percentage of loans are formalized by young people?

This reality changes considerably, because there is a framework and an adjustment between the expectations of those seeking mortgage credit and the reality they can obtain. Often, there is no supply of houses within the level they can reach, so they come to represent about 20-25% of formalized loans.

Young people taking out housing loans
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Has the role of mortgage intermediaries been strengthened? Why?

Undoubtedly. Today, credit intermediaries represent more than two-thirds of all new mortgage credit that banks formalize, so they have a huge weight. This happens largely because the market has realized – and is increasingly realizing – the advantages of using a credit intermediary. Right off the bat, they help families understand the market they can reach, what makes sense to pursue, and how. Then, the credit intermediary handles all the follow-up and negotiation with banking institutions, allowing for a much more efficient and realistic approach to demand.