One of the biggest obstacles to buying a first home is putting together the down payment banks require, generally around 20% of the price plus purchase costs. Public guarantee programs aim precisely to lower that barrier for certain groups, mainly young people and families with children.
What a public mortgage guarantee is
It's a mechanism through which the State (or a specific public body created for this purpose) guarantees part of the amount the buyer would normally have to cover with their own savings, allowing access to financing above the usual 80% loan-to-value limit, without needing personal guarantors such as family members.
How it works in practice
The bank grants the mortgage with a higher-than-usual financing percentage, while the public guarantor commits to covering the additional financed portion with the bank if the buyer defaults, within the limits and conditions set by each specific program.
Typical requirements for these programs
- Being under a certain age (usually around 35-40, depending on the program in force at the time), or meeting other specific requirements such as having dependent children or belonging to a large family.
- Not exceeding certain household income limits.
- The property meeting certain requirements (for example, a maximum price, or being your first primary residence).
This guarantee doesn't replace your monthly ability to pay
It's important to understand that the guarantee lowers the entry barrier (the portion you'd normally cover with savings), but it doesn't reduce the monthly payment you'll owe, which is calculated on the total amount financed (and that amount will be higher, since a larger percentage is being financed). You still have to meet the bank's usual solvency and repayment capacity criteria to be granted the mortgage.
Why financing a higher percentage means more risk
By financing a higher percentage of the home's value, the risk of ending up with negative equity if prices fall is greater, especially in the early years of the loan - a factor worth weighing realistically before signing up for one of these programs.
How to check whether a specific program is still active
These support programs change fairly frequently depending on the housing policies in force at any given time, so it's worth checking the current conditions directly rather than assuming a particular program is still available or keeps the same terms.
Simulate your payment with different financing percentages
Our mortgage calculator lets you compare how your monthly payment changes depending on the financing percentage, useful for gauging the real effect of accessing financing above the usual 80%.