A mortgaged property can be sold. Before completion, confirm the debt with the lender, the settlement process, applicable costs and the documents required to cancel the mortgage registration.
Key points
The sale requires coordination between seller, lender, buyer and the professional completing the transaction. The proceeds must cover the debt and remaining costs unless another solution has been agreed in advance by the relevant parties.
1. Confirm the loan and land registration
Identify every loan secured against the property and obtain the permanent land registry certificate. It shows registrations in force and pending applications, including mortgages or other restrictions that may affect the sale.
Do not assume there is only one security because you make one monthly payment. Confirm owners, borrowers, creditors and any attachment or other encumbrance before accepting an offer.
- Obtain or update the permanent land registry certificate.
- Identify every agreement secured against the property.
- Flag other encumbrances requiring professional review.
2. Request a settlement figure from the lender
Ask the lender for a written calculation for the expected completion date. It should distinguish outstanding capital, interest, any applicable early repayment commission and documented third-party charges.
For total early repayment, Portuguese law requires at least 10 working days' notice to the lender. Following the request, the lender must provide the information needed to assess the impact without delay.
- Provide an expected completion date.
- Confirm how long the figure remains valid.
- Ask how the mortgage discharge document will be issued.
3. Calculate the expected net proceeds
Before accepting an offer, compare the sale price with the total needed to repay the loan and the other transaction costs. Keep separate allowances for documents, agency services, completion and potential tax exposure.
The mortgage debt reduces the cash you receive, but is not itself a direct deduction in the Portuguese capital gains calculation. Tax is assessed under separate rules.
- Expected sale price.
- Lender's settlement figure for the relevant date.
- Costs and tax reserve assessed separately.
4. Coordinate payment, discharge and registration
Completion arrangements should state how part of the price will repay the loan and when the creditor will provide the document needed to cancel the mortgage. The discharge document confirms that the secured debt has been fully repaid and enables cancellation of the registration.
Coordinate the process in advance with the lender, buyer, buyer's lender where applicable and the professional completing the act. Casa Pronta can combine the sale and related registrations.
- Confirm payment instructions before completion.
- Ensure the creditor's document will be available when required.
- Check afterwards that the mortgage registration was cancelled.
5. Review special situations early
Seek financial or legal assistance before committing if the price will not cover the debt and costs, there are several creditors, arrears, attachments, co-owners or borrowers who are not the owners.
Additional conditions should also be checked where the loan benefits from a public guarantee or another special scheme. Do not rely on completion until the repayment and cancellation route has been confirmed.
- Price insufficient to repay debt and costs.
- Several loans, creditors, owners or borrowers.
- Attachments, arrears or special guarantees.
Frequently asked questions
Can I sell a property that still has a mortgage?
Yes. The loan settlement, creditor's discharge document and cancellation of the mortgage registration must be coordinated as part of or following completion.
How do I know the exact amount owed to the lender?
Request a written settlement figure for the proposed completion date. It may vary with interest, the repayment date, the applicable commission and documented charges.
What early repayment commission may apply?
Under the general regime, maximum limits are 0.5% for variable-rate agreements and 2% for fixed-rate agreements. Exemptions, reductions or special rules may apply, so check the agreement and current law at the transaction date.
Does the mortgage debt reduce the taxable capital gain?
Not directly. It affects the net cash received, while the tax calculation follows the Portuguese Personal Income Tax rules for acquisition and disposal values and evidenced eligible expenses.
Official sources
Consult the public bodies that support this information directly.
- Regime do crédito à habitação — Diário da RepúblicaDiário da República
- Reembolso antecipado — Banco de PortugalBanco de Portugal — Portal do Cliente Bancário
- Distrate de hipoteca — Banco de PortugalBanco de Portugal — Portal do Cliente Bancário
- Certidão permanente predial — JustiçaInstituto dos Registos e do Notariado
- Casa Pronta — JustiçaInstituto dos Registos e do Notariado
- Mais-valias e reinvestimento — Autoridade TributáriaAutoridade Tributária e Aduaneira
- Despesas e encargos — Autoridade TributáriaAutoridade Tributária e Aduaneira