Alentejo Region Leads Nation in Uptake of State-Guaranteed Youth Mortgages
The Bank of Portugal has released new data revealing that the Alentejo is the region with the highest proportional uptake of a state-backed mortgage guarantee scheme aimed at young homebuyers. This government program, designed to assist individuals up to 35 years old in purchasing their primary residence, has found significant traction in Alentejo and the neighboring Lezíria do Tejo region, while seeing comparatively lower adoption in the Lisbon Metropolitan Area.
According to the central bank's report, a total of 2,400 mortgage contracts featuring the public guarantee were finalized in July, representing a combined value of €475 million. Young people under the age of 35 accounted for 46.8% of this total amount. The cumulative data for 2025, from January to July, shows that 13,200 contracts have been signed under this regime, with the total financing reaching €2.5 billion. Nationally, these state-backed loans constituted 21.2% of the number of all new housing loans and 24.2% of the total value financed during the period.
The state guarantee mechanism was formally introduced via Decree-Law No. 44/2024. It provides a public surety for up to 15% of the property's acquisition value, applicable to homes with a price cap of €450,000. This initiative is intended to bridge the gap for young buyers who often face difficulties in securing the initial down payment required by commercial banks. By the end of July, the state had committed €348 million, which corresponds to 32.1% of the total budget allocated for the program.
The Bank of Portugal's analysis highlights a distinct regional variance. The report explicitly states that "the relative weight of the scheme is more elevated in Alentejo and Lezíria do Tejo, contrasting with lower values recorded in the Lisbon Metropolitan Area and the Autonomous Region of Madeira." This suggests that the program's parameters are better aligned with property values in more rural or less densely populated regions. In high-cost markets like Lisbon, the €450,000 property price limit may exclude a significant portion of the available housing stock, thus limiting the program's effectiveness for potential buyers in the capital.
The measure is scheduled to remain in effect for contracts signed through December 31, 2026. The data provides a clear indication of where the policy is having the most impact, pointing to a potential stimulus for the housing markets in regions like the Alentejo, driven by a new wave of young property owners. Navigate Portuguese property regulations with expert guidance at realestate-lisbon.com.
