Algarve property with a Portuguese mortgage for non-residents: sale of a flat plus savings as equity for an Alvor house
A married couple from Saxony – she a human resources manager, he an electrical engineer – were planning to move to Portugal completely within the next three years. Until then, the property was to be used regularly, while both continued to work mainly from home.
What does Alvor offer buyers of a terraced house?
Alvor combines an authentic town centre, extensive sandy beaches, the nature reserve at the lagoon and good infrastructure for daily life. The former fishing village has preserved its original character, and many German-speaking buyers deliberately choose it for their permanent centre of life.
Does the Portuguese bank co-finance modernisation?
As a rule no. Modernisation belongs in the overall plan and is paid from equity or by raising capital against German property.
How was the 676,000 € house financed?
With 439,400 € of financing and 320,600 € of equity, which also covered the 41,000 € additional costs and the 43,000 € renovation.
Living between nature, the Atlantic and Portuguese serenity: Alvor is one of the most charming places on the western Algarve. The former fishing village has preserved its original character and at the same time offers excellent everyday infrastructure. The waterfront promenade, the extensive sandy beaches and the nature reserve of the lagoon create a living environment that many German-speaking buyers deliberately choose for their permanent centre of life.
This practical case shows how buying a terraced house for owner-occupation can be implemented with balanced financing.
Where did the equity come from?
The equity came from long-term savings and the sale of an apartment. At the same time, the buyers wanted to keep part of their assets in reserve so that they could enjoy financial flexibility in their later retirement.
Before moving in, the house should be adapted, both technically and functionally, to suit their own living requirements.
Who were the buyers?
A couple from Saxony – she an HR manager, he an electrical engineer – planned a full move to Portugal within the next three years. Until then, the property was already to be used regularly while both continued their professional work largely from home.
After several viewings, they chose a modern terraced house in a quiet residential complex near the lagoon of Alvor. They were particularly convinced by the short distance to the town centre, the good accessibility of the beaches and the functional floor plan.
760,000 € in total, purchase costs and works included: Purchase price: 676,000 €; Additional costs: 41,000 €; Renovation: 43,000 €; Total investment: 760,000 €; Equity: 320,600 €; Financing required: 439,400 €.
What were the 43,000 € spent on?
A new fitted kitchen with more storage, one bathroom, energy-efficient air conditioning, fitted wardrobes and a home office; the house itself was immediately habitable.
Planned were a new fitted kitchen with additional storage, the modernisation of one bathroom, energy-efficient air conditioning with individual room control, the installation of high-quality fitted wardrobes and the conversion of a room into a combined home office and guest room.
As all measures were planned in detail before the purchase contract was concluded, they could be fully incorporated into the total investment.
The loan covers about 65 % of the price, the rest comes from own funds: The financing was set at around 65 % of the purchase price. This kept sufficient equity available while at the same time creating a long-term balanced financing structure.
Alongside the purchase price, all acquisition costs and all planned renovation measures were included in the overall plan from the outset — covered from equity, not by the bank loan. Additional financing steps after the property purchase were therefore not required.
Stays can be extended, with no further investment: Once the work was complete, a comfortable home was created that offers ideal conditions both for the remaining working years and for later retirement.
The buyers were able to extend their stays in Portugal step by step and prepare the final move without additional investments.
What does the case show for buyers in Alvor?
That planning the purchase including all renovation gives a robust overall calculation and avoids later financing gaps, especially for a permanent move to Portugal.
Especially with a permanent move to Portugal, this forward-looking planning pays off.
Terraced house in Alvor: extra costs and renovation paid from equity: Alvor combines Portuguese serenity with a high quality of life and an exceptional natural landscape. An overall plan that budgets the purchase price, acquisition costs and all planned renovation together at the time of purchase — the bank loan for the purchase price; costs and renovation from equity — creates the basis for a long-term secure and comfortable centre of life on the Algarve.
Detached house in Silves — case report: Anonymised case report: Detached house in Silves – German income, Portuguese property. Mortgage financing for non-residents.
Frequently asked questions
Why is the existing equity not used in full?
Many buyers want to preserve financial reserves and keep their asset structure balanced over the long term.
Which properties are especially in demand in Alvor?
Terraced houses, modern apartments, single-family houses and smaller villas in quiet residential locations are among the preferred properties for permanent owner-occupation.
Does the Portuguese bank co-finance the renovation of a terraced house in Alvor?
As a rule the Portuguese bank does not co-finance modernisation. It belongs in the overall plan, from equity or by raising capital against German property. In this case all acquisition costs and all planned renovation measures were covered from equity, not by the bank loan.
A similar situation in Portugal? Let's talk.
Every financing in Portugal is an individual case. In a free initial consultation we will tell you honestly what is feasible and which bank fits.
Anonymised individual case, not a binding statement for other projects · Brokerage under the §34i GewO licence held by Olga Nikushkina (D-W-132-ZUCB-95); Siegfried Perini registered as directly involved person (§11a GewO) · no tax or legal advice · no financing commitment; conditions depend on creditworthiness, loan-to-value and bank
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Content by Siegfried Perini — local brand representative since 2019, active in real estate since 1992, entered in the German intermediary register (§ 11a GewO) as a person directly involved in brokerage and advice. Point of contact for German-speaking buyers in Spain and Portugal. Brokerage by Olga Nikushkina, mortgage credit intermediary under § 34i German Trade Regulation (GewO); in Portugal through a locally licensed intermediary.