The Spanish Government launches a guarantee of up to 20% for mortgages, provided by the ICO, to boost the purchase of housing and maintain the real estate market active during the COVID-19 crisis. The measure will reduce the risk of default and increase the sector's security.
The Government of Spain has launched an unprecedented measure to help homebuyers during the COVID-19 crisis. It is the guarantee of up to 20% for mortgages, a measure aimed at boosting the purchase of housing and maintaining the real estate market active.
This guarantee, which will be provided by the State through the Institute of Official Credit (ICO), will allow buyers to access better financing conditions and, consequently, a greater offer of housing options.
One of the main advantages of this measure is that mortgages with a 20% guarantee will reduce the risk faced by financial institutions when offering loans in the midst of the health and economic crisis. In this way, banks will have more facilities to grant loans and buyers will be able to acquire their homes with more security.
How does the guarantee of up to 20% for mortgages work?
The guarantee of up to 20% for mortgages will be available for those who meet the following requirements:
- Be over 18 years old.
- Be a resident of Spain.
- Have no outstanding debts.
- Have an adequate payment capacity for the requested mortgage loan.
Once the requirements are met, the buyer may choose to apply for the guarantee to the State, which will provide up to 20% of the value of the home. This guarantee will have a maximum duration of six years and cannot exceed 100,000 euros.
It is important to note that, although the measure is aimed at first home purchases, it can also be used for second homes or rental properties, provided that the required requirements are met.
How will the guarantee affect the real estate market?
The guarantee of up to 20% for mortgages will have a positive impact on the real estate market, as it will encourage the supply and demand for housing, increase buyer confidence, and thus help keep the sector active.
In addition, this measure joins other actions taken by the Spanish Government to boost the purchase of housing. Among them are the reduction of VAT for the construction of homes and the expansion of aid for rental housing.
The combination of these actions seeks to combat the slowdown in the real estate market and the economy in general and prepare the ground for a gradual recovery.
It is important to note that the measure of the guarantee of up to 20% for mortgages helps shape a more solid and secure financial system for buyers, which will reduce the risk of default and increase the security of the real estate market. In addition, the transparency and stability offered by the measure provide greater confidence to buyers, which translates into an increase in investment and employment in the sector.
In conclusion, the guarantee of up to 20% for mortgages is an unprecedented measure that will help maintain the real estate market active during the COVID-19 crisis. Its positive impact will be felt throughout the sector and will benefit both buyers and financial institutions. It is, in short, a key measure to boost the economy and ensure stability in the real estate market.