How does the 20% guarantee approved by the Government to buy a house work?

This is not the first time we address this topic in our blog. In June 2023, we informed you about the approval by the Government of the guarantee intended to facilitate the buy of a house in our country.

8 months later, we bring you news about this measure: the deadline to formalize these loans has been extended until December 31, 2025.

20% guarantee for the purchase of a home

The Government has launched – through the Official Credit Institute (ICO) – a line of guarantees that allocate 2,500 million euros to facilitate the purchase of a first home for young people up to 35 years of age and families with minor children.

In general, this aid guarantees up to 20% of the value of the loan. This percentage can be increased to 25% if the property to be purchased has an energy efficiency rating of D or higher.

Objectives of this initiative

This measure aims to prevent anyone from having to spend more than 30% of their salary on mortgage payments.

In the same way:

• It enables more than 50,000 individuals and families, who had not been able to save enough to purchase a home, to obtain mortgage loans.

• It makes it easier for many young people to accelerate their independence process and helps to relieve the rental market in high-demand areas, especially in places where renting can be more expensive than buying.

It also supports small municipalities by encouraging residents to stay in rural areas.

Requirements to apply for the guarantee to buy a house

What are the conditions that must be met in order to apply for this assistance?

• Buyers must be citizens or legal residents in Spain, of legal age and prove such residence in a constant and uninterrupted manner for the two years prior to requesting the loan.

• The income per person must not exceed 37,800 € gross per year (equivalent to 4.5 times the public indicator of income for multiple effects, IPREM).

• If two people buy a house together, the income ceiling is doubled. However, the sum of their incomes must not exceed the limit per individual.

• This income limit will increase by €2,520 gross per year (0.3 times the IPREM) for each dependent child. For single-parent households it may be increased by up to an additional 70%.

• The assets of the beneficiary of the guarantee must not exceed €100,000.

• Those who already own another property are not admitted, except in specific cases such as:

1. Property inherited or acquired without a will.
2. Unavailability of one’s own home due to separation, divorce, involuntary circumstances or inaccessibility due to disability of the owner or members of the owner’s household.

• The guarantee is maintained as long as the property is the beneficiary’s primary residence, except for the previously mentioned exceptions that require a change of address.

Timeframes to consider when applying for a home purchase guaranty

These are the intervals to take into consideration when requesting the guarantee for the purchase of a house:

• The guarantee is valid for up to 10 years from the date the financial transaction is completed. This period remains fixed, regardless of the timing of the acquired loan.

• As we have already advanced, interested parties have until December 31, 2025 to formalize their loans under this guaranty initiative.

• There is the possibility that this period may be extended for an additional two years, as specified in the corresponding agreement.

Discover the best properties for sale

In KM2 Real Estate Services – real estate agency in Barcelona and Madrid – we have more than 41 years of experience in the sector.

A long trajectory in which we have had the opportunity to help countless families to find the home of their dreams.

Our real estate portfolio consists of very good assets located in some of the best areas of the city.

Looking for your new home? Contact us so we can help you find a home that meets all your needs, we look forward to meeting you!