What does it mean to request a bank guarantee when renting a home?

20/03/2025

If you are looking to rent a house, it is very likely that the owner will ask for a bank guarantee.

We explain what it consists of and what it means for you. In this way, you can compare it with other guarantee alternatives and assess which is the one that suits you best.

A bank guarantee is a letter issued by a financial institution that guarantees the payment of a certain amount of money to the lessor if the lessee, fails to pay the rent.

When the tenant requests the guarantee, the entity will evaluate their solvency and ability to meet the financial obligations of the rent. If the result is positive, the institution shall issue the guarantee. This document specifies the maximum guaranteed quantity, the period of validity of the guarantee and the conditions under which it can be claimed. Normally, it is formalized before a notary through a Bank Guarantee Coverage Policy.

The tenant gives the guarantee to the landlord as an additional assurance to the rental contract, and the landlord keeps a copy.  

If the tenant does not pay the rent or causes damage to the property, the landlord can claim the guaranteed amount from the entity. The bank will proceed with the payment to the landlord, and in turn, will claim the amount from the tenant.

If you need to request a bank guarantee, remember that your entity is providing you with a financial service with costs associated with its processing and commissions. In addition, the issuance of the guarantee may mean the freezing of the funds for an amount equivalent to the amount guaranteed.

A bank guarantee is one of the possible forms of assuranse. It is essential to assess the costs, conditions and financial implications, as well as to explore other alternatives, such as rental insurance, bail or personal guarantee. Find out more and choose the option that best suits your personal and financial situation.

“Disclaimer: Please note that this is a translation of the original in Spanish that has been obtained using eTranslation (the machine translation tool provided by the European Commission), with the intention of giving you a basic idea of the content in English until a human translation becomes available. The Banco de España accepts no liability whatsoever in connection with this translation.”