For old housing, the loan cap grows to EUR70,000 and the minimum required down payment remains at 5%.
For new builds, defined as no older than five years, the government would guarantee 60% of the loan value for the purchase of a newly-built home, excluding interests and bank fees, making up a maximum of 85% of the home acquisition price. The new-build category also includes homes that have been consolidated against earthquake risks in the past five years.
For other types of housing, where loans are capped at EUR70,000, the government would guarantee 50% of the loan value excluding interests and bank fees, making up a maximum of 95% of the home acquisition price.
The government seeks to stimulate the acquisition of newer, higher quality housing and implicitly help relaunch the country’s construction sector.
Loans under the First Home program, which require a down payment of just 5%, have lost ground over the past year and accounted for just 30% of new mortgage lending in May 2019 – April 2020, according to central bank data.
Standard mortgage loans, which require down payments of 15% to 25% have become more popular, accounting for 72% of new mortgage loans at the end of April 2020. Back in 2012, for instance, standard mortgage loans accounted for less than 30% of new mortgage lending.