Portugal's public guarantee for young buyers in 2027: what is decided and what is not
Not confirmed yet. Portugal's government wants to keep the public guarantee for young homebuyers in 2027, but the finance minister says no formal decision has been taken. Today, only mortgages signed by 31 December 2026 are covered. Here is what this means for your purchase.
In this article
- 01Will the public guarantee continue in 2027?
- 02How buying with a mortgage works in Portugal
- 03What is the public guarantee?
- 04Who can use it?
- 05How many young buyers use it?
- 06If you sign in January 2027, are you covered?
- 07Should you bring completion forward to December?
- 08What does borrowing the deposit really cost?
- 09Does the tax exemption for young buyers continue too?
- 10What to do now
- 11How FINOVA can help
- 12Sources
If you are 35 or under and buying your first home in Portugal, you may be asking one question: will the public guarantee still exist in 2027? The short answer is that it has not been decided yet. Here is what we know, what is missing and what to do if you are in the middle of the process.
Will the public guarantee continue in 2027?
There is no final decision yet. The report on the 2027 State Budget proposal, delivered to parliament on 8 October 2026, says the guarantee for buying a first home will continue.
But the finance minister, Joaquim Miranda Sarmento, said the decision to extend it beyond 2026 has not been formally taken. In other words, the government intends to keep it, but no rule has been published yet to extend the deadline.
Today, the guarantee only covers mortgages signed by 31 December 2026. The current rules already allow an extension after a review of the scheme's impact.
How buying with a mortgage works in Portugal
In Portugal, banks usually lend up to 90% of the value of a home you will live in. You pay the other 10% yourself. This is the deposit. On top of it, you pay taxes and fees at completion (the escritura), when the sale and the mortgage are signed.
For many young buyers, saving the deposit is the hardest part. The public guarantee was created in 2024 to help with this.
What is the public guarantee?
With the public guarantee, the Portuguese State acts as guarantor for part of your mortgage.
If you stop paying, the State covers that part for the bank, up to 15% of the purchase price. With this protection, the bank can lend more than the usual 90%, up to 100% of the home's value. The State does not pay your deposit. The bank lends it to you, and you repay it with interest.
Who can use it?
The rules are set by Decree-Law 44/2024 and the regulation that followed it. These are the main conditions:
- You are aged 18 to 35 and your tax residence is in Portugal.
- It is your first home, and you will live in it. You cannot already own a residential property.
- Your income is within the 8th IRS bracket or below. IRS is Portugal's income tax.
- The home costs up to 450,000 euros.
- You have not used this guarantee before.
Meeting the conditions does not mean you get the loan. The bank always decides. It looks at your income, your spending and your affordability limit: the share of your monthly income that goes to loan repayments. Since 1 August 2026, the Banco de Portugal, the country's central bank and regulator, recommends that this stays within 45% of net income as a general rule.
How many young buyers use it?
A lot. According to Banco de Portugal data, around 7,800 mortgages with the public guarantee were signed between April and June 2026. Together they were worth 1.7 billion euros.
| Indicator (April to June 2026) | Value |
|---|---|
| Mortgages with the guarantee, all ages | 28.7% of home-purchase mortgages |
| Mortgages with the guarantee, buyers up to 35 | 51.3% of mortgages |
| State budget for the scheme already used (to June) | 56% of the total |
Banco de Portugal data, as reported by idealista and Doutor Finanças. Figures refer to mortgages for a main home.
So more than half of young buyers who bought with a mortgage in those months used the guarantee. This is why the deadline matters so much to people planning a purchase.
If you sign in January 2027, are you covered?
Under today's rules, no. The guarantee only covers mortgages signed by 31 December 2026. If the extension is approved, 2027 mortgages will be covered too. Until a decision is published, nobody can promise that this will happen.
An extension is likely, but it is not certain yet.
If your purchase depends on the guarantee, plan for two scenarios: with it and without it. Without it, you need the 10% deposit and the money for taxes, or a cheaper home.
Should you bring completion forward to December?
It depends on where you are in the process. Before completion there are several steps: the bank's approval, the property valuation and the paperwork. As a general rule, this takes several weeks.
If your mortgage is already approved with the guarantee, it is worth talking to the bank and the seller about the completion date. If you are still choosing a home, the timing is tight. Rushing to sign before the end of the year should not lead to a poor decision.
What does borrowing the deposit really cost?
The guarantee helps if you have no savings for the deposit. But the deposit does not disappear. You pay it back with interest over the whole loan. An example shows the difference.
A 200,000-euro home, a 40-year mortgage and an interest rate of 3%.
Without the guarantee, the bank lends up to 90%, so 180,000 euros. The monthly repayment is about 644 euros. With the guarantee, the bank can lend 100%, so 200,000 euros. The repayment rises to about 716 euros. That is 72 euros more per month and about 14,000 euros more in interest over the whole loan.
FINOVA estimates for a new 40-year mortgage, with an interest rate of 3% for the whole term, without insurance or fees. Your real repayment depends on the Euribor (the reference rate that changes over time) and the spread (the margin each bank charges).
For many families, 72 euros more per month is the difference between buying now and saving for years. For others, it can make the budget too tight. It is a decision to take with the numbers in front of you.
Does the tax exemption for young buyers continue too?
The same budget proposal updates the tax exemption for young people buying their first home. IMT is the property transfer tax you pay when you buy a home. Stamp duty (imposto do selo) is another tax on the purchase.
If the proposal is approved, buyers up to 35 will pay no IMT, stamp duty or registration fees on homes up to 338,141 euros in 2027. This limit rises 2.3%, from 330,539 euros in 2026. Between 338,141 and 676,185 euros, the exemption only applies to the first 338,141 euros.
This is also a proposal. Parliament starts debating the budget on 27 October 2026, and the figures are only final after the final vote.
What to do now
- Check that you meet the conditions. Age, income, the price of the home and that it is your first home. If one is missing, the guarantee does not apply.
- Run the numbers with and without the guarantee. Knowing how much you need in each case avoids surprises halfway through.
- Get your mortgage approved before you commit to a property. You will know how much you can borrow and how long you have until completion.
- Follow the decision on 2027. We will update this article when the decision is published.
How FINOVA can help
At the start, we check whether you meet the conditions for the guarantee and what price range makes sense for your income. We run the numbers with and without the guarantee, so your plan does not depend on an extension that is not yet decided.
Then we take your case to several banks and follow each step until completion, including the timing, which matters more than usual this year. If you would like us to look at your case, get in touch.
There is no single answer for everyone. Waiting or going ahead depends on where you are in the process, your savings and how much room your monthly budget has. Even with the guarantee, the bank always decides whether to lend.
FINOVA compares offers from several banks and reviews each case individually. FINOVA's fee is paid by the bank, after completion. The mortgage process itself always has costs of its own: taxes, the property valuation and registration fees.
Sources
2027 budget report on the public guarantee and statements by the finance minister (October 2026): DECO PROteste (in Portuguese).
Main measures of the 2027 State Budget proposal (8 October 2026): Government of Portugal (in Portuguese).
IMT exemption limits proposed for 2027: DNotícias, with the Lusa news agency (8 October 2026, in Portuguese).
Conditions of the public guarantee (Decree-Law 44/2024): Imojuris. Deadline of 31 December 2026 and possible extension (Portaria 236-A/2024/1): Imojuris (in Portuguese).
Repayments and interest in the example: FINOVA calculation, using the assumptions stated in the text.
