Guides › Selling
How to sell a property with a mortgage in Portugal in 2026
You can sell a home in Portugal before the mortgage is paid off. At completion, part of the buyer's money pays the outstanding balance to your bank, the bank issues the mortgage release (distrate) and the mortgage is removed from the land registry. You must give the bank at least 10 working days' notice. Since 1 January 2026 the early repayment fee is back: up to 0.5% of the capital on variable-rate loans and up to 2% on fixed-rate loans, plus stamp duty. The release itself is free.
Selling a home in Portugal that still has a mortgage on it is very common, and you do not need to pay off the loan before you put the property on the market. The loan is repaid on completion day, with the buyer’s money: your bank receives the outstanding balance, hands over the mortgage release (distrate), and the mortgage is removed from the land registry. The buyer gets the property free of charges and you keep what is left.
The points that need care are the timing with your bank, the early repayment fee, which banks can charge again in 2026 on variable-rate loans, and the numbers that tell you how much money you will actually have after the sale.
How it works
- Payoff statement. You ask your bank for a statement of the amount owed on the expected completion date (declaração de dívida): capital, interest to that date, the early repayment fee and taxes.
- Notice of repayment. You tell the bank you will repay the loan in full. The law requires at least 10 working days’ notice.
- Completion (escritura). The buyer pays the price. The amount needed to clear the loan goes to your bank, following the bank’s instructions, and the rest goes to you.
- Mortgage release. The bank confirms payment and hands over the distrate, the document that allows the mortgage to be cancelled. On a sale, the bank is usually represented at completion.
- Registration. Whoever handles the completion (notary, lawyer, solicitor or a Casa Pronta office) registers the sale and the cancellation of the mortgage.
Ask for the payoff statement and tell your bank as soon as you have a completion date. Each bank has its own internal deadlines, and a document that only arrives on the day holds everyone up.
Step-by-step timeline
| When | What to do | Who |
|---|---|---|
| Before listing | Check the contract for the rate type and early repayment fee; ask the bank for an estimate of the balance | Seller |
| When an offer comes in | Make sure the price covers the debt, the fee and the selling costs | Seller and agent |
| Promissory contract (CPCV) | Set the completion date with room for the buyer’s mortgage and your notice period | Seller and buyer |
| At least 10 working days before completion | Give the bank written notice of full repayment; ask for the payoff statement for that date | Seller |
| Completion day | Price paid; your bank receives the balance and hands over the release | Buyer, seller and banks |
| After completion | Registration of the sale and of the mortgage cancellation | Whoever handles completion |
| Following weeks | Cancel the insurance linked to the loan; check the land registry certificate shows no mortgage | Seller |
The early repayment fee in 2026
Repaying a mortgage early is a borrower’s right. The bank may charge a fee, which must be stated clearly in the contract and cannot exceed these limits (article 23 of Decree-Law 74-A/2017):
| Rate type at the time of repayment | Maximum fee |
|---|---|
| Variable rate | 0.5% of the capital repaid |
| Fixed rate | 2% of the capital repaid |
On a mixed-rate loan, what counts is the rate in force when you repay: during the fixed period, the cap is 2%. Your contract may set a lower fee or none at all. Stamp duty of 4% is added to the fee (item 17.3.4 of the General Stamp Duty Table).
The variable-rate waiver has ended. Decree-Law 80-A/2022 suspended this fee on variable-rate loans for a permanent home. The suspension was extended several times, most recently by Law 1/2025, until 31 December 2025. The 2026 State Budget did not renew it, so in 2026 banks can once again charge up to 0.5%.
When there is no fee. The law bans the fee when the loan is repaid because of death, unemployment or a work relocation. A work relocation means that your place of work, or that of another household member other than descendants, moves more than 50 km in a straight line from the home and the household has to change its permanent residence. Unemployment requires registration at a job centre for more than three months. If you are selling for one of these reasons, give the bank the proof before completion.
Apart from the fee and taxes, the bank cannot charge other expenses for the repayment, except third-party costs it justifies with documents, such as registry or notary fees.
Other costs
| Cost | How much | Notes |
|---|---|---|
| Early repayment fee | Up to 0.5% (variable) or 2% (fixed) | As set in the contract |
| Stamp duty on the fee | 4% of the fee | Charged by the bank |
| Mortgage release (distrate) | Free | Charging for it is banned since 2021 |
| Payoff statement | Per the bank’s price list | Only free by law for social support purposes |
| Registering the mortgage cancellation | 50 € at a registry office, 45 € online | Double if filed late |
| Interest up to completion | As per the contract | Included in the payoff statement |
The release must be issued free of charge, and when a loan is fully repaid the bank has 14 working days to send it. The bank also cannot pass on any extra cost of choosing a document format that needs, for example, certified signatures.
Worked example
A home sold for 300,000 €, with 150,000 € of capital outstanding on a variable-rate loan and a 0.5% fee in the contract:
- Early repayment fee: 150,000 × 0.5% = 750 €
- Stamp duty on the fee: 750 × 4% = 30 €
- Total paid to the bank: 150,000 + 750 + 30 = 150,780 €, plus interest accrued to completion
- Registering the mortgage cancellation: 50 €
- Left for the seller: 300,000 minus 150,780 minus 50 = 149,170 €, before the agent’s commission and any capital gains tax
If the same loan were in a fixed-rate period with a 2% fee, the fee would be 3,000 € and the stamp duty 120 €: 2,340 € more than on the variable rate. If you have a mixed-rate loan close to the end of its fixed period, run the numbers for the completion date.
If you owe more than the sale price
The bank only issues the release once the debt is paid in full. If the sale price does not cover the loan, the fee and taxes, you have to pay the difference from your own funds at completion. Without that, the mortgage stays on the property and the buyer cannot buy it free of charges.
So before you accept an offer, confirm the balance and do the full calculation. If you know there will be a shortfall, talk to your bank before signing the promissory contract, to find out what it will accept and avoid a commitment you cannot keep.
Selling to buy another home
Your current loan is tied to the mortgage on the home you are selling. In practice, the usual route is to repay the loan at completion and take out a new mortgage for the new home, on current market terms. If you want something else, such as keeping your current loan terms, ask your bank: it depends on the contract and on the bank’s approval.
- Buying before you sell. You need to be able to pay two instalments for a few months. Under Banco de Portugal rules, the debt-to-income ratio includes all instalments, the new one too, and should not exceed 45% of net income, with limited exceptions.
- Bridging loans. According to DECO PROteste, products designed for swapping homes have largely disappeared since 2022. Millennium bcp offers a home-swap solution with a loan top-up of up to 70% of the valuation and a refund of the early repayment fee, up to 0.5%, if you buy within 12 months of selling. Terms change, so always check with the bank.
- Moving to another bank. If you repay the loan to move it to another bank, your current bank has 10 working days to give the new bank the information it needs, such as the outstanding capital.
For the costs of buying your next home, see our guide to the cost of buying property in Portugal.
Life and home insurance
The insurance the bank required is there to secure the loan. Once the loan is paid and the home sold, the bank no longer needs it, but it does not cancel itself: contact the insurer, or the bank if you took the policy through it, and cancel in writing.
- Home (multi-risk) insurance. Keep it until completion: until then the property is still yours. After the sale, the law generally entitles you to a refund of the premium for the unused period (calculated pro rata), unless the policy sets a different rule for a valid technical reason.
- Life insurance. The legal pro rata refund rule does not apply to life insurance. If you paid an annual premium in advance, check the policy terms for a refund.
Capital gains tax
If you sell for more than you paid, there may be income tax (IRS) on the gain. If the property is your permanent home and you reinvest the proceeds in another permanent home within the legal deadlines, the gain can be excluded from tax. For the reinvestment calculation, what counts is the sale value minus the loan repaid. We cover this in our guide to capital gains tax when selling property in Portugal.
How we help
When we sell with you, we work out the numbers with your outstanding balance before setting the price, coordinate the promissory contract and completion dates with your bank and the buyer’s bank, and make sure the payoff statement and the release are ready on time, in English. Find out more on our selling page.
This guide is general information. The terms of your loan contract prevail, and each bank has its own procedures and deadlines: always confirm the balance, the fee that applies and the documents needed with your bank before booking completion.