Public guarantee to unlock access to housing

The IBAVI Mortgage Guarantee Programme makes it easier for families to access mortgages

What does it consist of?

Given the growing difficulty for many to become home owners, the Government is promoting a guarantee programme managed by the Balearic Housing Institute (IBAVI). With a budget of 15 million euros funded by the Sustainable Tourism Tax fund, the initiative aims to lower the barrier of the initial savings required to get a mortgage.

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Data

PROJECT TITLE IN THE CALL
IBAVI Mortgage Guarantee Programme
LOCATION
Mallorca, Minorca, Ibiza, Formentera
Entity submitting the PROJECT
Govern de les Illes Balears
Entity that executes the project
Institut Balear de l'Habitatge (IBAVI)
Project code
ITS2023-028
Total project amount
15.000.000 €
ITS granted amount
15.000.000 €
Executed amount
8.152.942 €
Call year
2023
Execution status
In execution
Purpose
Social welfare
Budget execution
Executed: 54.35%
Last data request
26.02.2026

The project

Access to housing has become one of the main social challenges in the Balearic Islands. Rising prices, combined with the increasing cost of mortgage credit, have pushed many middle-income families out of the market. According to 2022 data, the average housing price exceeded €3,100 per square meter, with average mortgages close to €173,000.

The IBAVI Mortgage Guarantee Program aims to tackle this problem at its root. The Government, through the Balearic Housing Institute, will launch a line of public guarantees to cover up to 20% of the purchase value of protected housing—or up to 15% if it is free-market housing. In this way, banks will be able to finance 100% of the property’s cost, eliminating the need for substantial upfront savings.

The program has a budget of €15 million, funded through the Sustainable Tourism Tax. Requirements include legal residence in Spain, having lived in the Balearic Islands for at least five years, not owning another property, and meeting certain income limits. Property prices are also capped: up to €242,112 in Mallorca or Menorca, and €270,151 in Ibiza or Formentera.

IBAVI will act as guarantor before financial institutions, in collaboration with an external management entity. The measure will be temporary, limited to the initial stage of the mortgage until the outstanding capital falls below 80% of the appraised value. With this tool, the Government aims to ease market pressure and provide a stable and legal pathway to homeownership for those who, until now, have only found closed doors.