The central bank’s statistical report reveals that 37.4% of housing contracts signed by individuals up to 35 years old for purchasing a primary residence were secured through a state guarantee.
This involves a personal guarantee from the state, allowing banks to lend to buyers between 85% and 100% of the property transaction value, as long as the purchase does not exceed 450,000 euros. This guarantee covers up to 15% of the property’s transaction value.
Between January and June, individuals secured 2.1 billion euros in housing credit under this guarantee program.
“In the first half of 2025, 10,700 contracts for housing credit were finalized under the state guarantee scheme, totaling 2.1 billion euros,” stated the statistics institute, INE.
The state guarantee accounted for 20.5% of all contracts signed from January to June, regardless of buyers’ age, and represented 23.5% of all credit granted by financial institutions for primary residence purchases.
“When considering only the credit contracts for primary residences signed by individuals up to 35 years old, those under the state guarantee made up 37.4% of the contract numbers and 39.8% of the total contracted amount,” the central bank emphasized.
The Bank of Portugal highlighted that the proportion of properties acquired with public guarantee among young buyers was higher in the Alentejo and Lezíria do Tejo regions, while it was less significant in Greater Lisbon and the Autonomous Region of Madeira.
In May, another report by the central bank observed that buyers utilizing the public guarantee “generally have higher incomes than young individuals who obtain credit without the guarantee.”
“Lower-income borrowers have less representation in this scheme, both in terms of credit amount and number of contracts, compared to eligible borrowers,” the bank noted in the financial stability report.
The same document highlighted that the financial burden of young individuals using the guarantee was, on average, “six percentage points higher than the average of all new housing credit operations, and two percentage points higher than that of eligible borrowers who did not use the guarantee.”
