How to Save Money to Buy a House in 2025

To make informed decisions, it is essential to monitor the evolution of the real estate market in Portugal. According to the Portugal Market Report 2023–2024, published by Engel & Völkers, there is a trend of property appreciation in regions with high demand and limited supply, reinforcing the importance of starting to prepare the investment in advance.

Throughout this article, we share practical tips and useful advice for those planning to buy a house in the coming months or years. From defining financial goals to creating a realistic savings plan, including strategies to reduce expenses and maximise income, the goal is to offer clear and realistic guidance. In addition, it highlights the importance of relying on qualified professionals in the real estate sector, such as Engel & Völkers, who can make all the difference during the purchasing process.

If you're thinking about buying a property in 2025, now is the ideal time to start preparing. The decisions made today will directly influence the realisation of your project in the future.

1. Define a clear and realistic financial goal

Before starting any savings plan, it is essential to accurately calculate the amount needed to buy a house. In Portugal, the average price of a property in 2024 ranged between €160,000 and €200,000 outside major urban areas and could exceed €350,000 in large cities like Lisbon and Porto. For the initial deposit, banks usually require between 10% and 20% of the property’s value — for a €200,000 house, this means between €20,000 and €40,000 just for the down payment.

Additionally, you should consider:

• IMT (Property Transfer Tax) – varies depending on the value and type of property, with rates between 1% and 8%.

• Stamp duty – 0.8% on the purchase price.

• Deed and registration fees – between €1,000 and €2,000.

• Valuation and bank commission costs – usually between €300 and €800.

In total, additional costs can easily represent 7% to 10% of the property’s value. Having a well-defined financial goal from the start avoids surprises and allows for measurable targets.

2. Create an automated monthly savings plan

Based on the total amount needed, you can calculate how much to save monthly. For example, to save €30,000 in three years, you would need to set aside around €833 per month. If the timeframe is longer — say five years — the monthly amount drops to about €500.

Automating this saving with scheduled bank transfers to a separate account is a proven method of ensuring consistency. Choosing products like interest-bearing savings accounts or PPRs with liquidity allows your money to grow, with annual returns between 2% and 4%, depending on the financial institution.

3. Strategically reduce fixed and non-essential expenses

Most Portuguese households have between 60% and 70% of their monthly budget committed to fixed expenses like housing, transport, food, telecommunications, and energy. Small optimisations can free up significant amounts for saving:

• Renegotiating energy and communication contracts can generate savings of up to 25% per year.

• Avoiding consumer credit or consolidating loans can significantly reduce financial pressure.

• Cooking at home instead of eating out can save more than €150 per month in some cases.

• Cancelling non-essential subscriptions (like unused streaming platforms) can mean €20 to €50 in monthly savings.

These savings, when channelled directly into the housing fund, speed up the process without compromising comfort.

4. Increase available income through additional sources

In addition to saving, it's important to consider ways to increase monthly income. Common options in Portugal include:

• Renting a room at home (on platforms like Idealista or Uniplaces), with average rents between €250 and €400 per month, especially in urban areas.

• Freelance or part-time jobs in areas such as administrative support, digital marketing, tutoring, or delivery services.

• Selling second-hand items (clothing, electronics, furniture), which can generate hundreds of euros per quarter, especially on platforms like OLX or Vinted.

• Investing in certified training to access higher-paying roles. In Portugal, the income difference between someone with secondary education and someone with higher education can exceed 30%.

Even modest income increases, if directed solely towards the house fund, will have a significant impact.

5. Take advantage of public support and tax benefits

There are several government programmes that can help with buying a first home, especially for people under 35:

• Porta 65 Youth Programme – rental support for young people, allowing them to save during the support period.

• Municipal incentives – some municipalities reduce IMT or IMI for young buyers or large families.

• IRS Jovem scheme – partial income tax exemption in the first years of work, which can be redirected to savings.

• IMT exemption for properties up to €97,064 (in 2024) if for permanent residence and first-time buyers.

Regularly checking the Tax Authority, Social Security and municipal portals can make all the difference.

6. Analyse the real estate market carefully

Understanding the market helps define more effective strategies. For example:

• In 2024, price per square metre in Lisbon was around €5,200/m², in Porto about €3,500/m², and in mid-sized cities like Braga or Leiria between €1,800/m² and €2,400/m².

• Used properties can represent average savings of 15% to 20% compared to new ones.

• Some urban rehabilitation areas offer tax incentives and medium-term appreciation.

Having access to detailed market studies, such as those provided by Engel & Völkers, is essential for identifying good opportunities and avoiding overvaluations.

7. Avoid financial mistakes during the preparation phase

The most common mistakes made by buyers include:

• Committing to mortgage payments above 35% of net monthly income, exceeding the banks’ recommended debt ratio.

• Ignoring additional costs beyond the purchase price (IMT, deed, furniture, renovations, etc.).

• Making purchases or taking out loans in the months before applying for a mortgage, which can negatively affect the bank's risk analysis.

• Choosing properties with hidden costs (high condominium fees, need for structural repairs, etc.).

Detailed planning, with professional support, avoids hasty decisions and unexpected expenses.

8. Rely on expert support during the buying process

Buying a home is a technical, emotional, and financial decision. Having an experienced partner can be decisive in ensuring security, transparency, and efficiency throughout the process.

Engel & Völkers provides clients with a highly specialised team that supports them from the property selection to negotiation and final purchase. With access to exclusive properties, advanced technology tools, and data-driven consultancy, this professional approach helps buyers make informed decisions aligned with their profile and goals.

Saving to buy a home in 2025 is a challenge that can be met with organisation, strategy, and expert support. With a clear plan, discipline, and the right tools, turning the dream of homeownership into reality is within reach for those who prepare in advance.

Get in touch with Engel & Völkers, your best ally in finding the property you desire, with the best experts by your side.