Is there a maximum financing term for youth home loans with public guarantee?
Home loans for young people up to 35 years old with public guarantee have a maximum term for financing with the same rules as conventional home loans.
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 for mortgage credit are limited according to the age of the borrowers.
This means that clients aged 30 or younger can take out a home loan with a maximum term of 40 years; between 30 and 35 years old, a maximum term of 37 years, and over 35 years old, a maximum term of up to 35 years.
What it means is that, in the case of public guarantee, since it is only directed 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 old respectively.
So, public guarantee does not change the maximum credit term, it only facilitates financing by allowing a smaller down payment. The customer and the bank negotiate the loan term within legal limits and the financial institution's policy.
What to consider when choosing the deadline?
- Longer terms mean lower monthly payments, but also more interest paid over time.
- Shorter terms result in higher monthly payments, but allow for less total interest to be paid and for the debt to be amortized more quickly.
If you are considering resorting to public guarantee, it is important to carefully analyze the credit term and choose a balanced solution between affordable installment and total loan cost.
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