Young Buyers Drive 40% of New Mortgages in H1 2025, Bank of Portugal Reports
Data released by the Bank of Portugal shows that 10,700 mortgage contracts for primary home purchases were finalized under the state guarantee program between January and June of 2025. The total value of these contracts amounted to 2.1 billion euros.
A key finding from the report is the significant participation of young homebuyers. Individuals aged 35 and under were responsible for 37.4% of these contracts and represented 39.8% of the total monetary value of the loans. The data indicates a strong uptake of the government's program aimed at facilitating property acquisition for this demographic.
As of June 30, the Portuguese state had allocated 280 million euros in guarantees for these loans to young buyers. This figure corresponds to 25.9% of the total funds designated for the program. The month of June was particularly active, with 2,300 contracts signed by young people, totaling 441 million euros. This represented 46.1% of the contracts and 47.6% of the loan value for that month.
The report also provided a regional breakdown of the program's usage. The Alentejo and Lezíria do Tejo regions recorded the highest number of loans issued with a state guarantee. In contrast, the regions of Greater Lisbon and Madeira had the lowest number of contracts under this scheme.
The state guarantee program is a government policy designed to assist young people up to the age of 35 in purchasing their first permanent residence. It functions as a personal guarantee from the state, covering up to 15% of the property's transaction value, for a maximum property price of 450,000 euros. This allows banks to offer financing up to 100% of the home's value, removing the need for an initial down payment from the buyer.
Access to the guarantee is subject to several conditions. Applicants must have an annual income that falls below the 8th bracket of the IRS (income tax) and must not have a debt-to-income ratio exceeding 50%. Financial institutions retain the authority to approve or deny the credit based on their own risk assessment, even if an applicant meets the criteria for the state guarantee. The program is scheduled to remain in effect until December 31, 2026. Explore investment strategies and opportunities at realestate-lisbon.com.
