Buying Property in Portugal? A Key Law Affecting Mortgages is Stalled
Foreign investors and expats seeking to buy property in Portugal with financing could face an unexpected hurdle: the incomplete implementation of the 'Right to be Forgotten' law. This crucial legislation is designed to prevent insurers from denying life insurance (a prerequisite for most mortgages) based on a past, overcome medical condition. However, due to government delays in regulation, many buyers are still being unfairly blocked from the property market.
What Foreign Investors Need to KnowThe problem is simple: no life insurance, no mortgage. The law exists to solve this, but consumer agency DECO confirms it's not being applied effectively because of regulatory inaction. “This creates a significant risk for any potential buyer who has a history of serious illness,” explains a property law consultant. “You could find your perfect Lisbon apartment, only to have your financing denied at the last minute because of an insurance issue that this law was supposed to eliminate.” The Bank of Portugal has been criticized for not issuing clear guidelines to lenders, creating a bottleneck that directly impacts buyers.
Actionable Steps for Today's Buyer- Disclose Proactively: When speaking with a mortgage broker, be upfront about any past major health conditions to gauge potential insurance issues early in the process.
- Get Insurance Pre-Approval: Before making an offer on a property, try to get a pre-approval for life insurance to ensure this will not be an obstacle.
- Know Your Rights: Be aware of the 'Right to be Forgotten' law. While its application is flawed, citing it can be helpful in negotiations with insurers and banks.
- Consult a Specialist: Work with a mortgage broker who is experienced in handling complex cases and understands the current, challenging landscape.
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