canary islands 95 percent mortgage young buyers

Canary Islands unveils 95% mortgage scheme for young buyers

Canary Islands government pushes ahead with bold housing plan

The regional government of the Canary Islands is pressing ahead with its commitment to tackle the housing crisis. Its latest initiative, designed to address the archipelago’s severe housing emergency, is the Hipoteca Joven – My First Home programme, a scheme aimed at making it easier for young people to get onto the property ladder.

Programme approved and set to launch before summer

This morning, the Governing Council approved the draft decree that will regulate the programme, which is expected to be up and running before the summer. The announcement was made by Pablo Rodríguez, the regional minister for Public Works, Housing and Mobility. He confirmed that the text has now been sent to the Consultative Council, which has a maximum of 30 days to issue its opinion. The next step will be for it to return to the Governing Council for final approval.

“From that point, we will begin signing agreements and partnerships with the financial institutions that have already expressed interest,” the minister added. These institutions will be responsible for managing applications directly and processing the mortgages.

Up to 95% financing removes the biggest hurdle

The initiative will allow young people aged between 18 and 40 to access financing of up to 95% of the purchase price of their first home, surpassing the usual 80% limit typically offered by lenders. “This removes one of the main barriers to buying a home: the ability to save for a deposit,” explained Rodríguez. He noted that a similar scheme was used at the beginning of this century but disappeared following the financial crisis. “It was one of the goals we set ourselves: to bring back a tool that was enormously successful and which we are convinced will be just as relevant in the current climate,” he insisted.

Who is eligible and what are the requirements?

In addition to those under 40, large families and single-parent families can also benefit, with no age limit. Applicants must have been legally and continuously resident in the Canary Islands for the two years prior to making their application. They must not already own another property, with certain exceptions, and the home purchased must be used as their primary and permanent residence for a minimum of two years.

The net assets of the applicant – or each applicant in the case of a joint purchase – must not exceed €150,000. Income is also a factor. Applicants must not earn more than five times the IPREM (the Spanish public indicator of multiple-effect income). In the case of two applicants, their combined income must not exceed the sum of the individual limits. This amount is increased by 0.3 times the IPREM for each dependent child. For single-parent families, the income limit is increased by 70%.

The properties eligible under the scheme must be located in the Canary Islands and have a maximum purchase price of €250,000, excluding taxes and associated costs. The programme covers both new and second-hand homes, as well as free-market and privately built subsidised housing.

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