Major political parties gathered for a pivotal discussion as Spain moves toward the general elections on 23 July. The focus centered on how to promote housing access for young Spaniards within party platforms, while also addressing mounting price pressures and rising interest rates that affect households already paying a mortgage.
In this analysis, the selection programs of PSOE, PP, VOX and Sumar were examined through the lens of iAhorro, a respected mortgage consultant source. Notably, Vox’s program, led by Santiago Abascal, reportedly omits mortgage-related measures, so the comparison concentrated on the other three major parties.
Access to housing has become a global challenge, notes Antonio Gallardo, a financial expert at iAhorro. He identifies the core factors driving the problem: escalating prices, especially rents; a widening housing supply gap; and the uptick in interest rates.
Mortgage guarantees for young buyers
Among the highlights announced by PSOE and discussed for PP, there is a promise to back mortgage access for young people up to 35 years old. Recently, Pedro Sánchez approved a 2.5 billion euro guarantee line via the Official Credit Institute (ICO) aimed at enabling full mortgage access for youth. In practical terms, the guarantee would cover the buyer’s 20% equity, with banks typically financing 80% of the home price, so buyers would mainly cover ongoing costs. The measure awaits further development and implementation with the ICO.
For the PP, Alberto Núñez Feijóo proposed a similar guarantee for young buyers up to 35, covering mortgage loans up to 95% of the home price if he becomes prime minister.
iAhorro’s Antonio Gallardo weighs the two proposals as having both advantages and drawbacks. On the plus side, guarantee lines can remove a major hurdle, helping young people accumulate savings and move into a home sooner. However, a potential downside is that higher financing levels, such as 100% or 95%, could entail higher fees and debt ratios if current high interest rates persist. Banks may tighten credit if the monthly payments spike, despite the guarantees. The difference between the two proposals is that PP’s plan finances up to 95% of the home price, which could push the required savings higher but might allow somewhat lower installments due to a slightly lower funded amount. Indebtedness risk for lenders could also decrease modestly.
1,000 euro bonds against mortgage rises
One widely discussed bid features an emergency bonus of 1,000 euros aimed at households with variable-rate mortgages up to 250,000 euros and home prices up to 300,000 euros in the last decade. The left-leaning bloc, led by Yolanda Díaz, argues the measure would help offset some of the mortgage increases driven by Euribor movements. Antonio Gallardo compares this with a PP proposal of 750 euros to ease the burden on middle- and low-income households affected by Euribor increases. Feijóo says a solidarity fund between banks and the government, with 1.5 to 2 billion euros in contributions, would support the effort.
According to Gallardo, both measures can be helpful but are time-bound and do not tackle root causes. The 1,000 or 750 euro assistance could complement longer-term tools like Good Practice guidelines, but their impact is unlikely to be immediate given Euribor volatility. PP also considers a separate 1,000 euro bond to help youth with rent-related or home purchase costs, including deposits or sale-related taxes. Even so, Gallardo notes the amount seems insufficient to address the scale of Spain’s housing challenges, especially when confronted with the true costs of selling versus renting.
Greater mortgage flexibility and portability
PSOE proposes easing the burdens on borrowers facing higher installments by improving options available to all mortgage holders. Plans include facilitating early loan amortization, converting fixed-rate mortgages, restructuring loans, and requesting payment deferrals as needed. The iAhorro expert clarifies that switching a mortgage from variable to fixed remains a core feature of Good Practice guidelines and that such portability should be cost-neutral for the borrower.
Sumar pushes for mandatory mortgage portability, particularly for variable-rate loans, by requiring lenders to publish offerings on CNMC and to tailor products to individual profiles. The idea is to enable borrowers to switch to a product that better fits their finances without new costs from renewal, cancellation, or succession. This approach aims to help families adapt mortgage costs as 40-year terms unfold and interest rates shift. Gallardo finds the proposal interesting because it helps long-duration loans adjust to a changing market and could lessen the impact of higher payments on savings both now and in the future.
Additional measures: longer mortgage terms and a public bank
PSOE’s campaign includes raising the threshold for access to Good Banking Practices to 37,800 euros and extending the repayment period to seven years, along with a potential one-year payment freeze. Gallardo notes that any increases in relief are beneficial, provided they are implemented with care so they do not induce abrupt cost hikes in the near term. Sumar calls for a public bank to challenge the banking oligopoly and reduce mortgage costs. While this idea could democratize access, Gallardo cautions that even a state-backed bank might end up creating a “bad bank” scenario that would attract private banking, offering little advantage and significant costs. In sum, iAhorro concludes that while some measures are constructive, they may not fully resolve the housing crisis in the near term, and market dynamics will still demand pragmatic, multi-pronged solutions. (Source: iAhorro)