ICO Guarantees: Everything You Need to Know 2026

Guarantees from the Official Credit Institute (ICO) have become a fundamental tool in Spain, offering financial backing that facilitates access to loans. They are a good option for young people and families with dependents who wish to purchase a home, and with the support of these guarantees, they can obtain financing for up to 100% of the property's price.

What are ICO guarantees?

ICO guarantees are assurances provided by the Official Credit Institute to financial institutions to facilitate access to financing for self-employed individuals and businesses. These guarantees allow banks and other credit entities to grant loans with lower risk, as the ICO commits to assuming part of the responsibility in case of default. This translates into more favorable conditions for the borrower, such as lower interest rates and more flexible repayment periods.

In Spain, since May 2023, the Council of Ministers approved an ICO guarantee line of up to 2.5 billion euros to facilitate the purchase of a first primary residence for young people and families with dependents. Typically, mortgage loans cover 80% of the property's value, requiring the buyer to have the remaining 20%, which is often very difficult. ICO guarantees cover this 20% of the mortgage amount, allowing applicants to obtain financing for up to 100% of the home's price.

What are they for?

ICO guarantees are designed to facilitate access to financing for various purposes; currently, this guarantee is offered for the purchase of a first home. This is a guarantee line that aims to help around 50,000 people access their first home, individuals who have not been able to save the necessary amount for a down payment on an apartment.

Characteristics of ICO loans

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ICO loans have attractive features:

• Partial guarantees: the ICO offers a guarantee that covers a percentage of the loan, which reduces risk for financial institutions.
• Flexible conditions: ICO loans typically have repayment periods of up to 10 years.
• Competitive interest rates: financial institutions usually offer lower interest rates than conventional loans, thanks to ICO backing

How do they work?

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The operation of ICO guarantees is relatively simple:

1. You submit the application: the applicant must submit their application to a financial institution that works with ICO guarantees.
2. The financial institution evaluates: it will evaluate the viability of the loan and the applicant's repayment capacity.
3. They grant access to the guarantee: if the institution considers the loan viable, it will request the guarantee from the ICO, which will evaluate the application and, if appropriate, will grant the corresponding guarantee.
4. They disburse the loan: once the guarantee has been granted, the financial institution will proceed to disburse the loan to the applicant.
5. You repay it: as a borrower, you must repay the loan according to the agreed terms, and in case of default, the ICO will assume its corresponding share of the risk, allowing the financial institution to recover part of its investment.

Who can access ICO guarantees?

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Currently, ICO guarantees are available for young people under 35 and families with dependent children who wish to purchase a home in Spain. The guarantees facilitate home purchases, as they allow applicants to obtain financing for up to 100% of the home's price.

What are the requirements to apply?

These are the requirements to access ICO guarantees for purchasing a home in Spain:

First

Be under 35 years old or have dependent children.

Second

Have individual gross annual income of up to 37,800 euros. If there are two beneficiaries per home, the total will be 75,600 euros. For families with dependent children, the amount will increase by 0.3% per child. In the case of single-parent families, the increase will be 70%.

Third

Not be in arrears. There must be no overdue debts or defaults with public administration, financial institutions, or Social Security.

Fourth

Have assets worth less than 100,000 euros.

Fifth

Not own another home, although some exceptions are made, such as having inherited a property that is shared proportionally with other people.

It is important to note that, during these first ten 10 years, the home must be the habitual residence of the person guaranteed; it can only be rented out if circumstances arise that justify the need to change residence.

Which banks offer the guarantees?

Almost all financial institutions in Spain operating in the loan and mortgage sector can offer ICO guarantees. On the ICO website, there are 60 entities that have committed to offering the government's mortgage guarantee. These include several of Spain's most important banks, such as Banco Santander, CaixaBank, BBVA, Banco Sabadell, Abanca, Ibercaja, Unicaja EVO Banco, and Cajamar; as well as institutions like UCI, Arquia Bank, or Banca Pueyo, and most rural savings banks.

When can you apply for the ICO guarantee?

ICO guarantees can be applied for at any time, as long as the program is active. The deadline for formalizing mortgage loans with the credit institution will end on December 31, 2025, although it may be extended until December 31, 2027, depending on demand. You can request general information from your financial institution or on the ICO website.

Advantages and disadvantages of guarantees 

As with any process, there are advantages and disadvantages. Let's take a look:

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Advantages 

The advantages of applying for an ICO guarantee for buying a home are:

• Applicants can obtain financing for up to 100% of the home's price.
•  The amount of the monthly mortgage payment is reduced.
  • Also find out how to calculate a maximum mortgage with the support of these guarantees.
•  Mortgage conditions, such as the interest rate, are improved.
  • Discover how ICO guarantees can facilitate a mortgage transfer on favorable terms.

Disadvantages 

On the other hand, ICO guarantees have the following disadvantages:

• Applicants must meet very specific requirements to be eligible for a guarantee.
• They last for 10 years.
• In case of mortgage default, the ICO can enforce the guarantee and demand repayment of the debt from the applicant.

Frequently Asked Questions about ICO Guarantees

How many guarantees can a person have?

There is no specific limit on the number of ICO guarantees a person can apply for, but each application is evaluated individually. However, it is essential that the applicant demonstrates the ability to repay in each case.

How are ICO guarantees repaid?

ICO guarantees are not "repaid" as such, as it is not a direct loan, but rather a guarantee for a loan granted by a financial institution. Likewise, it is important to fulfill the obligations of the guaranteed loan, i.e., to pay the financial institution.

What are the interest rates for the ICO guarantee?

The ICO guarantee does not have an additional cost; that is, you do not have to pay the government or the ICO for providing the guarantee. However, it is important to note that you will pay interest on the money lent by the bank for the mortgage, including the 20% guaranteed by the government or 25% in cases where the acquired property has an energy rating of D or higher.

What happens if an ICO loan is not repaid?

When there is a mortgage default, the banking or financial institution initiates a foreclosure procedure to recover the lent money. The procedure involves auctioning the property, and the money obtained will be used to settle the debt.

If the money obtained from the sale of the property is not sufficient to cover the debt, the ICO can enforce the guarantee and demand repayment of the debt from the applicant.

Therefore, it is very important to be sure you can afford the mortgage payments before applying for it. Equally important would be to have life and unemployment insurance, which could help cover mortgage payments in case of default.

What is the maximum amount I can apply for?

The amount of the ICO-backed mortgage loan cannot exceed 100% of the lower of the appraisal value and the purchase price of the home (the lower of the two). This means that when applying for an ICO-backed mortgage, the financial institution will use the lower of these two values as a reference to determine the maximum loan amount. Furthermore, this amount will be subject to a regional limit, as each autonomous community has a maximum price applicable to home purchases.

How long does a guarantee last?

The duration of an ICO guarantee can vary depending on the financing line and the specific loan conditions. In the case of the guarantee granted by the ICO for mortgages, it is valid for 10 years from the formalization of the loan. If the mortgage term is longer than 10 years, the guarantee will only cover it for the first decade.

Is it possible to renew or extend an ICO guarantee?

The possibility of renewing or extending an ICO guarantee depends on the regulations in force at the time of application and the conditions established by the ICO. If you wish to extend an existing guarantee, it is advisable to consult with the financial institution to find out the specific requirements and the procedure to follow.

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Conclusion 

ICO guarantees represent a valuable alternative for individuals seeking financing in a challenging economic environment. If you are considering applying for an ICO guarantee, make sure you meet all the necessary requirements to maximize your chances of success.