Mortgage in Brazil, being the largest country in South America, is home to vibrant expat communities in all its major cities.
Many expats moved to Brazil between 2000 and 2012 due to the country’s abundant natural resources and its rapid economic growth during that period.
Although the economy faced challenges later, Brazil has recently experienced a rebound, which is great news for expats who are living, working, or investing in the country.
If you’re one of those expats, you might be thinking about buying a property in Brazil.
Whether you want a place to live in, an investment property, or a vacation home, it’s important to understand the process and what’s involved in getting a mortgage.
This guide will help you learn about the types of Mortgage in Brazil available to non-residents, the banks that offer these loans, the documents you’ll need, the legal considerations, and the potential costs. It’s essential to be well-informed before making such a big decision.
Types of Mortgages Available in Brazil
The mortgage market in Brazil is relatively underdeveloped compared to other countries, meaning there are fewer options for borrowers.
Typically, banks in Brazil offer a maximum loan-to-value (LTV) ratio of 80%, which means you’ll need to provide a 20% deposit upfront, along with extra cash to cover fees associated with the property purchase.
In Brazil, you can choose between fixed-rate and variable-rate mortgages.
Recently, as interest rates have been dropping from their previous highs, variable-rate mortgages have become more popular. However, it’s essential to consider which type of mortgage best suits your situation.
Different banks offer various products, so it’s important to compare options to find one that meets your needs.
Some mortgages might be specifically for purchasing commercial properties, while others could be designed for buy-to-let investments or summer homes in Brazil.
Make sure to explore the details to ensure the mortgage aligns with your plans.
Six Reasons to Buy Real Estate in Brazil
Investor Visa Eligibility
Foreigners who buy property in Brazil worth at least BRL 700,000 (around $140,000) in the north/northeast regions, or BRL 1,000,000 (around $200,000) in other parts of the country, can qualify for the Brazil Investor Visa.
This visa grants permanent residency to real estate investors.
Affordable Property Prices
Brazil has lower average house prices compared to the United States and other Western countries.
Foreigners can purchase large rural properties or beachfront condos at more affordable rates.
Tourism Growth
Brazil is becoming a more popular tourist destination. Investing in real estate in cities like Rio de Janeiro, Florianopolis, and São Paulo can be a smart move for foreign buyers who want to benefit from the growing tourism industry and own property in desirable locations.
Lower Cost of Living
The cost of living in Brazil is much lower than in the U.S. and many Western countries, making it an attractive option for those looking to live or invest there.
Diverse Climate
Brazil’s vast size means it offers a range of climates.
From tropical weather in the north to warm summers and cool winters in the south, there’s something for everyone.
Flexible Property Options
With a few exceptions, foreigners can buy most types of properties in Brazil, including residential homes, rural land, commercial buildings, and resorts.
This gives investors plenty of options to choose from.
What are the legal requirements to get a mortgage in Brazil as a foreigner?
As a foreigner, there are no legal restrictions preventing you from buying property in Brazil, especially in urban areas.
However, there are some limitations when it comes to purchasing property in rural or protected regions.
If you plan to buy property in those areas, you must demonstrate the intention to move there within three years of the purchase.
Foreigners, whether residents or non-residents, are allowed to legally own property in Brazil. However, obtaining a mortgage can be more difficult.
Most Brazilian banks require you to be a legal permanent resident to qualify for a home loan.
Without permanent residency, it’s unlikely you’ll secure a mortgage, though some banks may have different rules.
If you do find a bank willing to lend, you’ll need to provide a Brazilian tax number (CPF) and submit notarized copies of your personal identification documents.
How can I get a mortgage in Brazil as a foreigner?
Getting a mortgage in Brazil as a foreigner can be challenging, and your options might be limited.
It’s crucial to seek advice from a local specialist to understand the specific requirements and processes.
Here’s what you need to know:
Paperwork (Documentation)
The documents you’ll need may vary slightly depending on the bank, but generally, you can expect to provide the following:
- CPF (Cadastro de Pessoa Física): A Brazilian tax identification number.
- Personal Identification Documents: Copies of your passport and other identification.
- Proof of Legal Residence: If you’re a resident, you’ll need to show proof of your legal status in Brazil.
- Financial Proof: Documents showing that you have enough income or assets to repay the loan, such as proof of wages or a letter from your employer.
- Land Registry Certificate: Once you finalize your mortgage, you’ll need to provide the land registry certificate of the property you are purchasing.
Keep in mind that any documents not originally in Portuguese will need to be translated by a sworn translator to be accepted by the bank.
Step-by-Step Process
Here’s a general outline of the steps you’ll need to follow to get a mortgage in Brazil:
- Find a Mortgage Broker: It’s wise to work with a broker who is familiar with the Brazilian mortgage market and can help you navigate the process as a foreigner.
- Choose a Bank: Research and select a bank that offers a mortgage that fits your needs as a foreign buyer.
- Submit Paperwork and Get Pre-Approval: Submit the necessary documents, and the bank will likely provide an offer in principle, outlining the terms of the mortgage.
- Find a Property: Once you’ve been pre-approved, start looking for a home. Negotiate and agree on a purchase price with the seller.
- Finalize the Mortgage: After agreeing on a price, finalize your mortgage with your broker’s help.
- Pay the Deposit: You’ll typically need to provide a 20% deposit to secure the purchase.
- Sign the Deed: Both the buyer and seller must sign a deed prepared by a notary. The notary will also register the sale.
- Complete the Purchase: Your broker will help arrange the final payment of the remaining 80%, and you’ll need to manage the ongoing mortgage payments and cover any additional fees.
Important Notes
- It’s important to remember that mortgage options for non-residents may be limited, and not all banks will offer loans to foreigners.
- Working with a knowledgeable local advisor can simplify the process and help you avoid potential pitfalls.
Final Thoughts
Buying a new home is a significant decision, and when you’re purchasing in a different country, it can feel overwhelming.
To ensure everything goes smoothly, it’s important to fully understand your options and seek the right local advice.
By doing thorough research, you’ll be able to find a deal that best suits your situation.
With the right preparation, you could soon be relaxing under the Brazilian sun, enjoying your new home or vacation spot.
