The government announced last Tuesday the creation of ICO mortgage guarantees to revitalize the property market and give buyers a real chance to purchase a home. This initiative aims to provide a reliable path for those who want to buy and to boost confidence in housing demand through state-backed support, helping lenders manage risk while expanding access to mortgage credit.
ICO mortgage guarantees are part of a broader set of government measures designed to secure a meaningful portion of the loan against default. The goal is to open doors for potential buyers who previously faced obstacles to homeownership. Implementing these guarantees is expected to positively impact the housing sector, raising demand for homes and stimulating construction activity.
Young adults under 35 and families with dependents are the groups most likely to qualify for these guarantees, provided they meet certain conditions. The state will act as guarantor for 20 percent of the loan, or 25 percent if the home has an energy efficiency rating of D or higher, making it easier to secure a mortgage for a property that is often the main hurdle for first-time buyers.
Questions and answers about ICO mortgage guarantees
On the social platform TikTok, a widely followed finance and law channel explores the main questions about the government guarantees. The channel has a large audience and is known for addressing current legal and financial topics. The presenter highlights common doubts about the ICO guarantees as they relate to home purchases, and they provide concise explanations. This content is among the most viewed in its niche, reflecting public interest in housing policy and mortgage support.
In one of the recent posts, the presenter summarizes the most frequently asked questions and offers clear answers. Here are the key points:
1. What does it mean that the state is your guarantor? It means the state stands behind the debt if the borrower fails to pay. It does not provide free money to the borrower.
2. What are the requirements to obtain this ICO guarantee? Several criteria must be met to access these aids.
Economic requirements
- Individual income up to 37,800 euros gross per year
- If two people sign the mortgage, the limit is 75,000 euros
- Maximum net worth of 100,000 euros
Other requirements
- Young applicants up to 35 years old
- Families with dependent children
- Must have resided in Spain for at least two years prior to the loan application
3. Does the home have to be the primary residence and habitual? Yes, but the condition may change over time as explained below.
4. How long is the guarantee valid? The guarantee lasts 10 years regardless of loan amortization. During this period the property must remain the primary and permanent home of the borrower. After this period the requirement ceases to apply.
5. Does the aid have any cost? Is there a fee payable to the state by the borrower or the bank? No, the guarantee is free for both the applicant and the lending institution.
6. When can the guarantee be requested? The government aims to have the program ready between late February and early March, though final dates were not confirmed. It can be requested until December 31, 2025, with a possible two-year extension based on demand, which is expected to be high.
7. How is the guarantee requested? Potential beneficiaries will apply through participating banks.
8. What funding has the government allocated to these guarantees? A total of 2.5 billion euros is earmarked for the program.