In the first quarter of this year, the mechanism that allows young people up to the age of 35 to finance the entire value of their home accounted for 9% of the number of contracts and 13% of the total amount of new mortgage loan contracts in the first quarter, according to data released on May 21 by the Bank of Portugal's Financial Stability Report.
The document also reveals that the banking institutions that joined the protocol to access the state guarantee have already used 10% of the maximum amount available between January and March. "However, the use of the guarantee varied between institutions; some used more than 30% of the limit allocated, while others didn't reach 5%", says the Bank of Portugal.
The public guarantee, which came into force in January this year, allows the state to act as guarantor for young people up to the age of 35 when buying their first permanent home, guaranteeing up to 15% of the value of the transaction. This mechanism was created to facilitate access to 100% credit for young people who, despite having sufficient income to pay the monthly installment, are unable to raise the capital needed for the initial down payment.
Image credits: © Adrien Olichon | Unsplash
Translated with DeepL.com (free version)
