Spanish government and banks to ease mortgage conditions for vulnerable citizens – EURACTIV.com

A deal to help one million vulnerable citizens mitigate the negative impact of inflation on their monthly mortgages was announced by government and banking industry officials on Tuesday.

Vulnerable customers will now be able to restructure their mortgage with a lower interest rate for a five-year grace period (Euribor rate -0.1% compared to the current Euribor +0.25%), EFE reported. , partner of EURACTIV.

The main beneficiaries of the new measure are households whose income is less than €25,200 per year, i.e. three times the IPREM (index used in Spain as a reference for the granting of public aid and subsidies), and households that spend more than 50% of their monthly income on mortgage payments.

But the agreement has expanded its initial scope and will allow other households to benefit from these measures as well, with a two-year grace period, a lower interest rate during the grace period and an extension. of duration up to seven years, according to the financial daily Cinco Días reported.

AEB, CECA and Unacc, the main Spanish banking associations, and the country’s left-wing executive have agreed to update the sector’s Code of Good Practice (dated 2012) with the aim of adapting it to new economic circumstances of the war in Ukraine, with soaring energy prices and record inflation.

In addition, the Spanish government has taken care to include the obligation to safeguard the rights of customers benefiting from these measures so that, in the event of the transfer of credit to another entity (banks), these conditions are maintained.

The measure, which will be in effect for two years, aims to help families adjust more gradually to the new interest rate environment.

Households whose income is less than three and a half times the IPREM (€29,400 per year) and whose mortgage was signed before December 31 will be eligible.

They must also meet the requirement that the mortgage charge is greater than 30% of their total household income and that the payment has increased by at least 20% due to the recent rise in interest rates.

The government estimates that up to 700,000 households could benefit from this new protocol, more than double that of the updated Code of Practice already in force.

(Fernando Heller | EuroEFE.EURACTIV.es)

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