Two thirds of the state mortgage guarantee for buyers under 35 used up. Extension into 2027 not yet approved
By the end of September banks had used €1.42 billion of the money the state set aside to guarantee mortgages for buyers under 35, or 66.5% of the total. Banco de Portugal (the Bank of Portugal) published the figures on 29 October (ECO, Jornal de Negócios).
Since the guarantee was introduced in July 2024, 48,900 mortgage contracts worth €10.3 billion have been signed with it. That is almost half of all first-home loans taken out by people under 35. In July–September there were 8,700 such contracts worth €2 billion, 11.5% more than in April–June. Buyers are hurrying because, for now, the guarantee only covers contracts signed by 31 December 2026.
The guarantee is used most often away from the big cities: in the Alentejo, Trás-os-Montes and several other inland areas it backs more than 55% of young buyers' mortgages, while in Greater Lisbon and Madeira the figure is around 40%. In terms of the number of contracts, however, half are in Greater Lisbon, Greater Porto and the Setúbal peninsula.
The state guarantees part of the home's price to the bank, up to 15%, so the bank can lend the full purchase price with no deposit. The home must be the buyer's first home and permanent residence, and cost no more than €450,000. The other conditions are set out in our article of 8 October.
In its draft 2027 budget the government says it will extend the guarantee. But the finance minister, Joaquim Miranda Sarmento, says no final decision has been taken: the extension has to be approved by the Council of Ministers.
Until the extension is approved, a mortgage with the state guarantee has to be signed by 31 December 2026.
