The program, first launched in 2009, would be renamed New Home and would benefit homebuyers looking for bigger, newly-built homes, as well as real estate developers.
The new plan for the program includes government guarantees covering 80% of the mortgage loan from a previous rate of 50%.
The finance ministry’s proposed bill states the government would subsidize 60% of mortgage loans for new builds priced at maximum EUR100,000 and 50% for old builds priced at a maximum EUR70,000.
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.