Spanish government to guarantee 20% of mortgage for those aged 35 or under

The Spanish government will approve a new measure on Tuesday to help young people buy their first home. The cabinet will act as guarantor for up to 20% of a mortgage taken out by those aged 35 or under and families with children, only if annual income is less than €37,800.

Spanish prime minister Pedro Sánchez announced the measure during a trip to Tenerife in the Canary Islands on Sunday.

The €37,800 limit on income will double if the property is bought between two people and they ask for a joint mortgage.

For those families with children under 18, there will be no age restrictions when asking ICO (Spain's Official Credit Institute) to act as a guarantor.

Government at odds 

The new measure has not been universally welcomed by members of the cabinet. Minister of Social Welfare, Ione Belarra, claimed it "encouraged the mortgage spiral". Belarra is a member of Podemos, the smaller party in Spain's coalition government. 

Transport minister Raquel Sánchez, a Socialist, rejected that criticism, saying at a press conference on Monday that the mortgage guarantee was one initiative of many aimed at improving access to housing and that it could benefit up to 50,000 families.

"What the government wants to do is to mobilize all the resources it has at its disposal to establish the foundations of a new housing model," Raquel Sánchez said. "The reality is that there are families and young people who want to purchase a home," and ICO guarantees "make it possible," she said. 

Sánchez was speaking after meeting with housing sector representatives and unions. 

Number of mortgages fall 29.4% in March 

The number of mortgage loans to buy homes fell by 29.4% in March compared to the same month last year, to 4,520, according to data from the Observatorio del Col·legi Notarial de Catalunya (Catalan Notaries Observatory).

This is the most pronounced year-on-year decline in the ltwelve months, confirming the downward trend in mortgages, a drop that notaries attribute to increases in interest rates. 

The fall in Catalonia exceeded the Spanish average by three points, which stood at 26.4% year-on-year. 

The average mortgage installment in Catalonia in March was €1,580, above the average for Spain. 

50% off Interrail and high-speed train prices 

Spanish PM Pedro Sánchez made the housing announcement the day after proposing that buses and trains across Spain and Europe this summer will have discounts for Spaniards aged 18 to 30.

The PM announced the measure in the southern Spanish region of Murcia on Saturday. It will be greenlighted at the cabinet's weekly meeting on Tuesday.

Europe's Interrail tickets will have a 50% off from June 15 to September 15, and trains and buses in Spain will have a 90% price reduction. High-speed trains will also see a 50% price cut.

The goal is to help young residents travel across Spain and Europe and to strengthen the cultural and tourism industry.