Young Home Loan with 100% Financing: What You Need to Know

What is the young home loan with 100% financing?

This special scheme allows young people up to the age of 35 to obtain a home loan that covers the entire purchase price of the property. The financing is granted by banks participating in a protocol with the Portuguese State, and is partially guaranteed by a public fund that covers up to 15% of the property's value, thereby reducing risk for financial institutions.

The scheme is available to both salaried employees and self-employed individuals, as long as they meet the eligibility criteria.

Who can benefit from this support?

The main eligibility criteria are:

1. Be 35 years old or younger at the time the loan contract is signed.

2. Not own any other property in Portugal.

3. Have fiscal residence in Portugal.

4. Purchase the property for primary residence.

5. Meet the bank’s creditworthiness requirements.

Applications for second homes or investment purposes are not accepted. The goal is to support access to a first home.

How does the application process work?

Applicants must contact a participating bank and submit the required documentation, including proof of income, tax returns, asset declarations, and information about the property. The bank reviews the application and, if it meets the criteria, forwards it to the public guarantee fund for validation.

What are the benefits of this scheme?

• No need for a down payment, enabling purchase without years of savings.

• Easier access to credit thanks to the public guarantee.

• Competitive interest rates negotiated under the protocol.

• Promotes financial stability and independence for young buyers.

What are the risks?

As with any high-percentage loan, 100% financing can lead to higher monthly instalments and increased financial pressure. It is essential to perform simulations and ensure the debt-to-income ratio does not exceed recommended levels. Moreover, prudent property valuation is important to avoid owing more than the property's real value.

What types of properties are eligible?

Eligible properties include those intended for primary residence, located in Portugal, with a valid occupancy license and in good condition. Properties under construction or for renovation may be accepted if they meet legal and valuation criteria.

What is the role of real estate consultants?

The support of real estate consultants can be crucial in this process. Experienced professionals assist not only in finding the right property but also in guiding clients through the financing process. Working with a team experienced in the real estate sector, like Engel & Völkers, ensures that every step is handled securely and in compliance with the law.

Consultants also help identify properties that meet the scheme's requirements and suggest the best financing options available based on each buyer’s profile.

What are the costs involved?

Although the property price is fully financed, buyers must consider other mandatory expenses: taxes (such as IMT and Stamp Duty), deed and registration fees, bank charges, and insurance policies. Being aware of all property purchase costs and documentation is crucial to avoid surprises.

Support from an Engel & Völkers team ensures accurate cost estimation and transparent, efficient planning throughout the purchase.

Where to find eligible properties?

The best way to find suitable properties for this financing scheme is through trusted real estate platforms and agencies. Start by exploring the options to buy a house with Engel & Völkers, one of the most respected brands in the industry.

With a global network and a vast portfolio, Engel & Völkers helps buyers identify the best opportunities across Portugal, taking budget, location, and lifestyle into account.

Outlook for 2025

In 2025, a rise in applications for young home loans with 100% financing is expected, particularly in urban areas where prices remain high. Although still recent, this measure has proven to be a powerful tool to promote first-time homeownership among young people, fostering social mobility and long-term financial security.

With the right support and careful planning, this policy could be the beginning of a new chapter in many young buyers' lives—whether Portuguese or foreign residents seeking to settle in Portugal.

The right path to independence

The young home loan with 100% financing presents a real opportunity to achieve the long-desired goal of homeownership. By removing the barrier of an upfront payment, the government is making the housing market more accessible and inclusive.

Nevertheless, interested applicants must be proactive, informed, and responsible in managing their loan. Collaborating with industry professionals and relying on a trusted agency like Engel & Völkers can make all the difference for a secure, sustainable, and financially balanced purchase. If you're considering buying a home in Portugal, this might be the perfect time to take action. Don’t hesitate to seek advice and take the first step towards owning your home.