Novobanco and Montepio Exhausted Their Share of the Young-Buyer Housing Guarantee, and Wednesday's Despacho Tops It Up by 100 Million Euros
Despacho n.º 10855/2026 gives Montepio 60 million euros and Novobanco 40 million of extra portfolio guarantee after both hit their ceilings. The envelope reaches 2.4 billion euros, and the scheme still expires on 31 December.
Two Portuguese banks ran out of the state guarantee that lets buyers under 35 borrow the full price of a first home, and on Wednesday the Treasury gave them another 100 million euros to keep lending.
Despacho n.º 10855/2026, published in the Diário da República (Official Gazette) on Wednesday and signed by the Secretary of State for Treasury and Finance, João da Silva Lopes, authorises 60 million euros of additional portfolio guarantee for Caixa Económica Montepio Geral and 40 million for Novobanco. Both had exhausted the ceiling allocated to them when the scheme was carved up between participating lenders, and both applied to the Entidade do Tesouro e Finanças (Treasury and Finance Authority) for more.
The order says the allocation was sized on each bank's forecast of the loans it expects to write and on how those loans attach to the portfolio guarantee. It justifies the top-up on the ground that the measure encourages housing accessibility for young people and is of "manifest interest to the national economy", and notes that signing it was a precondition for the two institutions to carry on lending under the scheme without a break.
A 2.4 billion euro envelope, and a December deadline
The guarantee line opened at the end of 2024 and has been enlarged repeatedly since: by 350 million, again in March, and by a further 750 million in April, which took the envelope past 2.3 billion euros. Wednesday's despacho lifts it to roughly 2.4 billion.
Take-up still lags the headline number. Banco de Portugal (the Bank of Portugal) reported that at the end of June 2026, 1,146 million euros of the total then allocated had actually been used, or 56 percent. That gap is the reason individual banks can hit their own ceilings while the national envelope looks far from spent: the guarantee is parcelled out lender by lender, and the ones lending fastest run dry first.
The more pressing date is 31 December. The scheme expires at the end of this year and the government has not said whether it will be extended, a cliff this publication reported on in May, when 32,338 contracts had been signed. The central bank has been openly critical of the design, which allows a young buyer to finance 100 percent of a purchase, and has been drafting macroprudential limits around it.
Who the guarantee is for
The rules have not changed with Wednesday's order. The applicant must be between 18 and 35, buying a first permanent home, not already the owner of another dwelling, and earning no more than the eighth bracket of IRS (personal income tax). The conditions are cumulative, so failing one closes the door.
The property is capped at 450,000 euros, measured on the lower of the purchase price and the bank's valuation. Within that, the state guarantees up to 15 percent of the transaction value: on a 200,000 euro flat, up to 30,000 euros. The percentage is scaled down proportionally where the bank finances less than the full amount, so a buyer putting down a deposit gets a correspondingly smaller state backstop.
The guarantee sits alongside, and is separate from, the IMT and stamp duty exemption for buyers under 35. It also runs against a tighter credit backdrop: the Bank of Portugal cut the maximum debt-service ratio to 45 percent from August, and interest now absorbs 49.5 percent of the average Portuguese mortgage payment. Readers weighing a purchase will find the mechanics set out in our guide to buying with a Portuguese home loan.
