Is there a maximum financing term for young mortgage credit with public guarantee?

What is the maximum deadline allowed in youth housing credit with public guarantee?

In Portugal, the rules of the Bank of Portugal (BdP) dictate that the maximum financing periods in mortgage credit are limited according to the age of the borrowers.

This means that clients with an age equal to or less than 30 years old can take out a home loan with a maximum term of 40 years; between 30 and 35 years of age, a maximum term of 37 years, and over 35 years of age, a maximum term of up to 35 years.    

What this means is that, in the case of public guarantee, since it is only aimed at young people up to 35 years old, the term can correspond to 40 or 37 years of financing, depending on whether you are up to 30 or up to 35 years respectively.

So, the public guarantee does not change the maximum credit term, it only facilitates financing by allowing a lower down payment. The client and the bank negotiate the loan term within legal limits and the financial institution's policy.

Read more: What is the maximum age to apply for a home loan?

What to consider when choosing the term?  

• Longer terms mean lower monthly installments, but also more interest paid over time.  

• Shorter terms result in higher monthly installments, but allow for less total interest to be paid and debt to be amortized more quickly.

If you are considering using a public guarantee, it is important to carefully analyze the credit term and choose a balanced solution between an affordable installment and the total cost of the loan.

Get to know the measure better: 100% financing in housing credit for young people: How does it work?

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