Youth mortgages in Spain: a financing option for home buyers aged 35 and under

For many young people, the dream of home ownership can seem far out of reach, or something that is a long way off in their future. In particular, when we think about foreign nationals buying homes in Spain, we often imagine older people, with established careers, looking for a second home, or even retirees looking to spend their post-working lives in the sun. Applying for a mortgage is already a complicated process, and as a foreign national, even more so. Being under 35 on top of that might make it seem an impossible task.

However, in Spain there does exist a special financial product that could change your perception of this: mortgages for young people. These are specifically designed for people aged between 18 and 35 years old who want to buy a home and whose characteristics, needs, and demands are often different from those of customers in other age brackets. For example, they often have less savings or a reduced length of service with their employer.

Not all banks apply the same conditions to these mortgage loans, although some of the most common advantages on the market include longer contract terms, interest rate discounts, grace periods in the first months or a higher percentage of financing. We review what it is that financial entities can offer to young people who want to buy a home, what requirements must be met, where to find this type of financing, and how to choose the best alternative:

What is a mortgage for young people?

The so-called mortgage for young people, or simply youth mortgage, is a type of mortgage that some banks offer to people between 18 and 35 years of age. This type of mortgage product is characterised by being conceived and designed for people in this age bracket and, in general, they usually have specific financial conditions that are intended to fit the profile of the young people they are targetted at. For example, they take into account that these customers often have a lack of savings, or a lack of seniority in their career, etc.

Advantages of mortgages for young people

It should be borne in mind that mortgages for young people are not the same in all banks. Therefore, each mortgage product may have its own particularities. However, in most cases, when talking about mortgages for young people we will find at least some of the following advantages:

• The possibility of having an initial period of grace on the loan.
• Discounts on the interest rate.
• In many cases, no opening fees.
• Loan repayment periods of up to 40 years.
• Financing of up to 90% of the property in many cases.
• Aid for young people's mortgages from the Public Administration (the State, local councils, etc.).

Requirements to apply for a young person's mortgage

It is necessary to take into account that, when applying for a youth mortgage, you need to fulfil certain requirements that may vary from one bank to another. But, in most cases, they are the following:

• You must be under 35 years old (though it may be another age limit, depending on the bank).
• The mortgage must be for the purchase of a first home.
• Depending on the bank, it may be necessary to have some initial capital. This is because the bank in question may not finance 100% of the price of the property.
• You must have an employment contract or a stable employment situation.
• You may need a guarantor in case you do not have sufficient seniority with your employer.
• In some cases, in order to access a young person's mortgage, other products from the bank must be contracted in addition (for example, home insurance or similar).

How to find a young person's mortgage

In addition to the different requirements that each bank may demand to grant a young person's mortgage, it must be taken into account that the conditions of each mortgage product may also vary from one bank to another. For this reason, it is essential to compare the mortgages available on the market to find the best mortgage that suits your needs and characteristics before making a decision. 

And a quick and easy way to find out which mortgages for young people are currently available is to use online mortgage comparators, such as the idealista mortgage comparator. This tool allows you to find out about the mortgage options that exist, which will help you choose the alternative that best suits the needs and preferences of each client. 

Is it compulsory for people under 35 to apply for mortgages for young people?

Although youth mortgages are usually the best option for people with this profile, this does not mean that because you are under 35 you are obliged to take out this product when you want to sign a mortgage.

Mortgages for young people are usually the best option for this profile because they take into account the general characteristics of this group. However, it may be the case that a young person has specific conditions that differentiate him/her from the majority of people in their age bracket and, in this case, he/she may be more interested in opting for a standard mortgage instead of a youth mortgage.

In any case, and precisely for this reason, it is highly advisable to remember the importance of comparing mortgages before choosing one product or another. This will be the best way to have a complete vision that will give you the perspective you need to know which mortgage is the one that best suits your profile, taking into account both your economic situation and personal preferences as a mortgagor.