The Government of Andorra and the Andorran banking sector are launching an innovative programme to facilitate the purchase of a first home for residents.

The Government of Andorra, in collaboration with Andorran banks, has approved a new support programme to encourage the purchase of a first home for habitual and permanent residence by residents of Andorra.

The programme combines a 100% public guarantee on the loan for seven years, the full subsidisation of interest by the Government during these first 7 years, and unique financial conditions tailored to the current need to increase the number of families with their own home, offered by the Andorran banking sector:

  • For the first 7 years, loans are granted at 12-month Euribor with no spread.
  • From the eighth year onwards, the interest rate is set at a maximum of Euribor +0.50%, a very low margin compared to market standards.

“This is an unprecedented joint effort: the Government provides security and a subsidy, and the banks are doing their part by offering credit at the Euribor rate, with no margin, for seven years. It is the best opportunity to turn rent payments into your own property,” highlighted Ms Conxita Marsol, Minister of Presidency, Economy, Labour and Housing.

“The agreement with the Andorran banks is an exercise in shared responsibility: the Government assumes the risk with a guarantee and subsidy for the first seven years, and the financial institutions reduce financing conditions to the minimum while facilitating a long-term return of up to 50 years. In this way, the transition from the support phase to the open market is made smooth and sustainable,” added Mr Ramon Lladós, Minister of Finance.

“From Andorran Banking, and indeed the banks, we very much welcome this agreement. The sector recognises that facilitating access to a first home is a national challenge, and for this reason we have made a mortgage product available tailored to Andorra’s current needs: seven years at the Euribor rate plus a 0.5% margin later. It is a notable effort by the institutions that will contribute to giving stability to families and confidence to the economy,” stated Ms Esther Puigcercós, General Manager of the Association of Andorran Banks (Andorran Banking).

 How it works

  • 100% guarantee of the mortgage loan by the Government for 7 years.
  • Subsidy by the Government of 100% of the interest (12-month Euribor) during this period.
  • During these 7 years, the beneficiary pays only capital each month, with a maximum monthly payment defined at 33% of their income.
  • Exceptional and unconditional interest rate:

      o   12-month Euribor with no margin for the first 7 years.

      o   12-month Euribor +0.50% from the eighth year onwards.

  • No arrangement or cancellation fees; early repayment free of charge.
  • Maximum property price: €600,000.

Who is eligible

  • Individuals who are residents and can prove 7 years of legal, effective and uninterrupted residence in Andorra (with justified exceptions).
  • Must not own any property in Andorra or abroad.
  • Net worth must be less than 30% of the purchase price.
  • Minimum income: 2 times the current annual minimum wage.
  • Must be up to date with tax obligations.

Key benefits

  • Access to a home with no deposit: the Government guarantees the entire loan for the first 7 years.
  • Affordable repayments: the monthly payment is capped at 33% of income and is used entirely to reduce the principal.
  • Unique financial terms and long repayment terms of up to a maximum of 50 years.
  • Smooth transition: once the support period ends, the bank’s margin is very low (+0.50%), which allows for stable repayments.
  • People covered by Decree 127/2023 will be able to convert their loan to the new conditions

Processing

  • Prior bank assessment: the institution confirms the credit’s viability under the Programme’s conditions and issues a favourable certificate.
  • Application to the National Housing Institute (INH) using the form at www.inh.ad (available from the publication of the call for applications).
  • Decision by the Technical Housing Commission (Housing, Finance and INH).
  • Signing of the mortgage loan and commencement of the support service.