Portugal's public mortgage guarantee: check before the CPCV

Your income can support the payment, but you have not yet saved the 10% or 15% that a lender would normally leave unfunded. Portugal's public guarantee may help a lender finance between 85% and 100% of the transaction value. It does not, however, turn the purchase into a savings-free, risk-free or automatically approved deal.

Before the CPCV, confirm four figures: who is eligible, how much the lender will approve, what value the valuation supports and how much cash you will still need.

The guarantee supports the loan; it does not pay the deposit

Under this scheme, the Portuguese State acts as guarantor to the institution. The guarantee can cover the part of the loan above 85% of transaction value, up to 15%. This allows a participating lender to fund between 85% and 100% of that value.

Imagine a home with a price and valuation of €250,000. If the lender approves a €250,000 mortgage, the guarantee can cover €37,500—the 15% above €212,500. The lender advances the money and the buyer owes €250,000, plus interest and charges. The State does not transfer €37,500 to the buyer.

The guarantee runs for the first ten years of the agreement. It is not an interest subsidy, grant or buyer's insurance. Banco de Portugal stresses that it enables access to more credit without removing the duty to repay it.

Every buyer has to pass the test

Under the scheme's current conditions, each buyer and borrower must meet the applicable requirements when they are checked.

For a joint purchase, it is not enough for one person to qualify. Every buyer must be a borrower and every buyer must be eligible. An old share in a residential property, a buyer over 35 or an unresolved tax position can change the plan.

The home and agreement also matter:

• it must be the borrowers' first acquisition of their own permanent home;
• transaction value cannot exceed €450,000;
• the loan must be secured by mortgage;
• under the currently published rules, the credit agreement must be concluded by 31 December 2026;
• the institution must have joined the protocol and have guarantee allocation available.

The scheme does not cover credit for construction, building works or real estate leasing. Confirm your specific eligibility and required evidence directly with the institution; do not base the CPCV on an informal reading of the rules.

The calculation uses the lower value

For this guarantee, transaction value is the lower of:

1. purchase price;
2. the lender's valuation when the credit is contracted.

This rule is decisive. If you agree to buy for €280,000 but the valuation is €260,000, funding 100% of transaction value means no more than €260,000. You still need €20,000 to complete the price before other costs.

The guarantee does not cover a premium paid above valuation. Nor does it force the lender to reach 100%: it can approve a lower percentage, reduce the amount for affordability reasons or reject the property.

Keep preparing your own cash

Even where the lender funds its full accepted base, there are expenses and risks outside the mortgage. Build the budget before paying a reservation or CPCV deposit.

The public guarantee and the young-buyer IMT relief are separate schemes. They can be combined when each set of requirements is met, but tax relief does not fix a low valuation or pay every expense. Read our guide to IMT Jovem before buying a first home and request an up-to-date calculation for your circumstances.

Avoid spending all liquidity at completion. A 100%-financed home leaves the buyer more exposed to a fall in value, a higher payment or a loss of income. The cash buffer matters more, not less.

Eligibility is not approval

Even if you meet every condition, the institution does not have to grant the loan. It still assesses income, stability, other debts, term, age at maturity, the property, insurance and future repayment capacity.

Banco de Portugal explains that its macroprudential recommendation still applies. Institutions generally test whether payments on this mortgage and other debts fit net income and apply stress scenarios. The guarantee also does not prevent a lender from requesting additional security, such as another guarantor.

Request offers from participating institutions and compare FINE documents with the same amount, term and repayment structure. Check:

• the amount actually approved, not merely simulated;
• nominal rate, APRC/TAEG, total repayment/MTIC and payment including insurance;
• products required for the discounted spread;
• the payment in the stress scenario;
• deadline and conditions still outstanding;
• confirmation that the institution has allocation available for the guarantee.

The institution cannot charge a fee for the State guarantee itself, but it may charge other mortgage costs. Identify the source of each charge.

Do not make the CPCV depend on an assumption

Before promising a date and risking the deposit, identify what remains open:

1. eligibility of every buyer;
2. final financial approval;
3. a sufficient valuation;
4. legal and technical acceptance of the property;
5. guarantee availability at the institution.

Ask the lender or intermediary for written answers and a realistic timeline. A simulation or pre-approval does not replace final approval or the approved FINE.

With legal advice, negotiate CPCV conditions addressing finance, minimum valuation, access to the guarantee, completion deadline and treatment of the deposit if a condition fails. The clause must fit your transaction; simply writing “subject to finance” can leave important questions unanswered.

If the State pays, the debt does not disappear

On default, the State may pay the institution up to the guaranteed limit. This does not forgive that amount for the buyer. The borrower remains liable to the lender for the uncovered amount and to the State for what it paid.

Borrowing more capital also usually increases total interest. Compare maximum funding with a scenario where you contribute a deposit:

You may make early repayments or sell during the guarantee. A mortgage transfer can preserve it for the remaining term, but only if the receiving institution has joined the protocol and has allocation available. Always confirm the rules then in force before relying on a future change.

Next step

Before signing the CPCV, ask the institution for its evidence checklist and written confirmation of the four figures: everyone's eligibility, maximum loan, valuation base and cash still required. Only then align the deadline, conditions and deposit with your lawyer.