Mortgage payment calculator

The constant monthly payment you pay comes from the French amortization system: P = C · i / (1 − (1+i)⁻ⁿ). C is the amount you finance, i is the monthly interest rate (the TAN divided by 12) and n is the number of months in the term. The formula guarantees the amount paid is always the same, but its composition changes month by month: at the start, most of it is interest on a loan amount that is still almost untouched; near the end, it’s almost all principal, because the balance has already shrunk.

The TAN (nominal annual rate) that feeds the formula is always Euribor + spread. Euribor is the rate at which European banks lend to one another, and it moves every day; your contract fixes a reference rate — 3, 6 or 12 months — that sets how often the bank updates the Euribor it uses and recalculates your payment. With a 12-month reference rate the payment changes less often, but each revision can be a bigger jump; at 3 months it adjusts sooner, in smaller steps.

We show you the TAN, not the TAEG. The TAEG (APR, annual percentage rate of charge) includes the TAN plus mandatory insurance, fees and other loan charges — it’s the figure the law requires banks to disclose on the standardized information sheet (FIN, ficha de informação normalizada), and it’s worth asking for before you sign. There are credit intermediaries registered with Banco de Portugal who compare proposals from several banks for you; they are paid by the lending institutions, not by the client — we don’t recommend any one in particular, but comparing proposals only costs you time.

An example with today’s most common scenario: €200,000 financed with Euribor 6M at 2.723% and a 0.9% spread (TAN 3.623%), over 30 years, gives a payment of €911.88 a month. The monthly payment is only part of the sum — to find out how much you need in the bank on the day of the deed (deposit, taxes, registrations, commissions), use the total purchase costs calculator.