No Downpayment Needed
The Portuguese Government introduced the Public Guarantee (Decree-Law No. 44/2024) to help young people (up to 35 years old) purchase their first permanent home, allowing for up to 100% financing of the property’s value.
It feels impossible to save for a home while rents keep rising.
Madeiran father, Idealista.pt
Key Requirements to Get the Loan
Age between 18 and 35, with tax residency in Portugal.
Annual income up to €83,696 (8th IRS bracket).
Must not own any other residential property.
Property value must not exceed €450,000.
No debts to Tax Authorities or Social Security.
Mortgage must be approved under regular bank risk criteria.
How it Works
The State guarantees up to 15% of the initial loan amount, making 100% financing possible without a down payment.
Example: For a €200,000 home, the State guarantees the €30,000 normally required as a downpayment.
Participating Banks
Most major banks and also smaller ones are involved, each with a set maximum guarantee amount. That is the general aggregate amount that can be used to provide loans.
Until When Does This Run?
The measure to provide 100% loan support for young people is valid until December 31, 2026.
Additional benefits
The support can be combined with exemptions from IMT (property transfer tax), stamp duty, and notary fees. Loan renegotiation: Borrowers can renegotiate their loan terms without losing the public guarantee, provided the renegotiation doesn't increase the State’s liability.
Why This Makes Sense
The program is specifically designed to help young people who may not have had the time to build significant savings but are still ready to take on homeownership. It's an investment in your future, giving you a chance to build equity in your own home instead of paying rent.
By using the Public Guarantee now, you lock in a property price that may rise in the coming years. If you were to wait, you could find yourself paying much more for the same home later.
Why A Low Salary Won’t Give You Market Access
While you avoid paying an upfront amount, the overall loan amount stays at 100% of the property price, which can lead to higher monthly costs. Also, with a low salary, it can become tricky to get a bigger loan.
Example Calculation
If you can afford a €450 monthly payment, a 3% interest rate, and a 30-year loan, the estimated loan amount would be about €100,000 - €110,000 - which will not give you market access in Madeira, where a decent T1 or even a studio can easily cost you €150,000 or more.
Source: Diário de NotÃcias da Madeira
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