Can you buy property in Madeira with a mortgage?

Yes. Portuguese banks provide financing to both Portuguese residents and non-residents, so you do not necessarily need to buy a property entirely with your own funds.

For non-residents, banks typically finance 60–70% of the property value. This means you should plan to contribute 30–40% of your own funds, plus taxes and transaction costs. The upper limit is set by Banco de Portugal recommendations: up to 90% of the property value when the home is being purchased as a primary and permanent residence (meaning the buyer has no other officially owned residential property); for other purposes, the limit is lower.

The final outcome depends on the specifics of each case: your declared income and how it can be documented, your tax residency, age, loan term and the particular bank. The property valuation is also important: the bank carefully assesses the property you intend to purchase, including its year of construction, quality, location and many other factors. There is also a special programme for buyers under the age of 35.

When buying a new-build property at an early stage, payments are made from the buyer's own funds under a CPCV (Contrato-Promessa de Compra e Venda). In Portugal, this is an official promissory purchase and sale agreement that legally commits both the seller and the buyer to complete the final transaction in the future. The bank becomes involved closer to completion of the development.

In my work, I assist clients not only with selecting property in Madeira, but also throughout the bank-financing process — from an initial assessment of their borrowing capacity to the property valuation and completion of the transaction.

The best place to start is with a bank-confirmed budget before the first viewings. That way, you immediately focus on properties that meet both your own requirements and the bank's criteria.

Viktoria Pavlovskaya — private real estate and investment expert in Madeira. Consultation is free, with no obligation.