If you are 35 years old or younger, have been residing in the Community of Madrid for at least two years and want to buy your first home, you can now request the help that the Government of Isabel Díaz Ayuso announced in July 2022 within the “My First Home” plan. intended for young people without savings to access their first home.
With an investment of 18 million euros, the Community ‘endorses’ the difference between the 80% financing normally granted by banks and financing of up to 95% of the appraisal or sale value of the home. Among the conditions are that the price of the home does not exceed 390,000 euros (without expenses and taxes for its acquisition), that it will become the owner’s habitual residence for at least two years and that he does not own any other home.
How can you ask for help?
Three financial institutions have joined the plan of the Community of Madrid: CaixaBank with its young online banking Imagin, Banco Santander and Ibercaja. Despite the fact that at first there was talk that there could be a Community portal through which to make requests, in the end all the procedures are done directly through the banks, either in person or through their website. In order to request it, in addition, a series of documents must be presented:
DNI or NIECertificate or flyer from the municipal register stating that the owner has been residing in the Community of Madrid for two or more yearsRegistry Certificate that demonstrates that the future owners do not have any other property in the property for saleA responsible statement by the person concerned in which he states his commitment that the home will be used as a habitual and permanent residence for at least two years from the date of acquisition
What do financial institutions offer?
The entities adhering to the plan have adhered to the conditions imposed by the Community of Madrid, but they have also implemented their own. Therefore, Banco Santander’s offer is different from that of Ibercaja and Imagin, and vice versa.
For example, Banco Santander and Ibercaja offer financing of up to 95%, while CaixaBank’s online and youth banking limits financing to 90%. The repayment term also changes: Ibercaja announces a 25-year term on its website, but Santander and Imagin extend it to 30 years.
Another difference can be seen in the commissions, since, while at Ibercaja they do not charge commissions for opening or partial or total repayment of the loan, at Banco Santander they do impose them and at Imagin they do not specify it. One of the common conditions of the three banks is the imposition of a guarantee or mortgage guarantee that provides the bank with security that, in the event of non-payment by the owner, someone will take care of that debt.
What mortgages can be requested and are their characteristics appropriate?
Regarding the types of mortgages that can be requested, Banco Santander and Ibercaja give the user the option of choosing between a fixed or variable mortgage. Imagin, for its part, only offers its imaginBank Fixed Mortgage. Of course, despite the fact that the three entities market the mixed mortgage, none of them offer it as part of the aid to young people in the Community of Madrid.
In addition, it must be taken into account that, when this plan was announced, last July, interest rates were much lower than now: from seeing mortgages with average rates of 1.5% before, now the offers have risen almost up to double and are around 3%.
Banco Santander does not offer details of the interest rates it offers in its fixed or variable “Youth Mortgage” and advises asking the entity directly because, depending on the customer’s profile, that offer will change. For its part, Ibercaja does publish its commercial offer (although it may also vary depending on the stability of the buyer) within its range of Vamos Mortgages.
In the fixed-rate mortgage based on a TIN of 2.95% and an APR of 3.89% if the bonus conditions are met, that is: direct debit of payroll, use of credit card and direct debit of receipts; contracting home and life insurance from Ibercaja, and periodic contributions of at least 75 euros per month to one of its investment funds. In the event that the mortgage is requested without discounts, the TIN rises to 3.95% and the APR to 4.15%.
In the variable rate mortgage with all the above bonuses, the TIN for the first year is set at 0.99% and the rest of the years would be governed by Euribor + 0.60%. If the bonuses are not contracted, the first year remains the same, but for the rest of the mortgage the interest would be calculated with Euribor + 1.60%.
Imagin’s offer for its fixed mortgage, a priori, seems the most profitable due to its few links: just by direct depositing the payroll, the TIN of the mortgage is 2.70% and the APR is 3.17%. Without that bonus, it would remain at a TIN of 3.45% and an APR of 3.93%.
