Buying a home in Spain is an almost impossible task for any young person due to the low savings capacity that they employ and their salary. That is why, in recent times, entities have begun to promote mortgages for people under 35 years of age, offering them a great opportunity to grow!
In this article you will find:
What is it about?
At the end of 2019, 4 out of 10 Spaniards under the age of 30 paid a mortgage or lived in a house they owned. According to the Youth Emancipation Observatory of the Youth Council of Spain, being able to establish a home for them is very difficult since the obstacles they encounter severely limit them.
For banks, this audience is very attractive, and why? Through mortgage loans, banks seek to attract new customers who stay for a very long period of time until the debt is completely extinguished. And that is why the entities began to incorporate mortgages for those under 35 years of age, classifying them as mortgages for young people.
In exchange for some type of added bonus, as long as the loan was signed before this moment, it is likely that once this threshold has been exceeded, the bank will sell the customer associated products such as insurance, subscription to a pension plan or direct debit of the payroll.
As explained by the director of Mortgages of the bank buyer iAhorro, Simone Colombelli: ¨Although this type of client does not have great savings or is not in the best professional moment of his life, when contracting the mortgage the entity ensures a new client practically for life to obtain profitability ¨.
It should be noted that to obtain interest rates that are not very high, the requirements to contract a mortgage will be more demanding. Labor and professional ties to certain sectors that can be considered more reliable, such as being a civil servant or working in new technologies, would be valued, in the event of not being able to demonstrate certain employment seniority; Indian Vicenç Hernández Reche, President of the National Association of Real Estate Agents.
Beyond the segment of the population that banks are targeting, it is also essential to mention that they allow financing up to 95% of the purchase of a home, when the usual thing is that it covers up to 80% of the acquisition.
List of financiers that offer mortgages for under 35 years old
The Banco Santander youth mortgage is a product that can cover up to 95% of the acquisition when it comes to a first home. As a requirement, the owner must provide a personal guarantee, and with this guarantee the amount of the loan that exceeds 80% of the value of the property will be guaranteed for five years. After that period, it will expire.
The entity does not charge commission and to return the money gives a term of up to 30 years. The interest on this credit is from 1.50% to 30 years if it is fixed and from Euribor plus 1.39% if it is variable. However, the client is conditioned to contract various bank products such as: direct debit payroll or income, subscribe life or home insurance, use credit or debit cards, and invest in plans or funds.
As a differential in this case, it is that it allows financing up to 100% of the purchase. For this, the owners must be able to provide an additional guarantee such as the property owned by the parents. It has no commissions, it can be returned in up to 30 years, and it does not require contracting other products to be able to access this type of service.
The interest can vary from Euribor plus 1.59%, fixed from 2.85% to 30 years or mixed of 2.39% for 10 years and Euribor plus 1.19% afterwards.
KUTXABANK AND CAJASUR
What these two entities do is apply a low interest rate as long as one of the holders does not reach 35 years of age. They finance up to 80% of the purchase with a term that may reach 30 years.
It is a fixed 1.45% during the first year and Euribor plus 0.79% from the second until that age limit is reached. And Euribor plus 0.89% for the rest of the pazo. Kutxabank, in return, will request a direct debit of the payroll and take out home insurance, and one of its pension plans. While on the other hand Cajasur will demand to use one of its cards.
It has the cheapest mortgage loan for people under 36 years of age. It does not charge commission and finances up to 80% of the purchase with a maximum term of 30 years. In order to access this mortgage for young people, it is necessary to collect an income of 1,200 euros per month (among all the holders) and be under 36 years old.
In this case, the interest is 1.99% fixed for the first two years and Euribor plus 0.95% for the following years. You have to domicile the aforementioned recurring income and two receipts, take out life and home insurance from the bank in question. It is also necessary to have a partner title of the entity and use one of its credit cards.
Other offer options regardless of age
However, on the other hand, not all banks or entities finance this type of product designed exclusively for young customers. Most of them offer an offer that is personalized according to the profile of the applicant without ties to age. The fact that in the context of a pandemic and a global health emergency, youth employment suffered especially, Hernández stressed.
Taking into account the real estate crisis suffered since 2008, where the authorities and banks were forced to adopt criteria of prudence to mitigate delinquencies, it very directly affected the financing percentages as well as the increase in rigor in the criteria for solvency and loan repayment . What did they do then? Consequently, it is for this reason that several entities chose to widen the segmentation of their public and set aside mortgages for those under 35 years of age exclusively.
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We suggest you read the following note on Mortgages for foreigners in Spain.