An agreement to help one million vulnerable citizens mitigate the negative impact of inflation on their monthly mortgages was announced by the government and representatives of the banking sector on Tuesday.
Vulnerable customers will now be able to restructure their mortgage loan with a lower interest rate during a five-year grace period (Euribor rate -0.1% compared to the current Euribor +0.25%), EURACTIV’s partner EFE reported.
The main beneficiaries of the new measure are households with an income of less than €25,200 per year, which is three times the IPREM (an index used in Spain as a reference for the granting of aid and public subsidies), and households that devote more than 50% of their monthly income to mortgage payments.
But the agreement has widened its initial scope and will allow other households to also benefit from these measures, with a two-year grace period, a lower interest rate during the grace period and an extension of the term of up to seven years, financial daily Cinco Días reported.
AEB, CECA, and Unacc, Spain’s main banking associations, and the country’s left-wing executive agreed to update the Code of Good Practices in the sector (dated 2012) with the aim of adapting it to the new economic circumstances derived from the war in Ukraine, with soaring energy prices and record high inflation.
In addition, the Spanish Government has made sure to include the obligation to safeguard the rights of customers benefiting from these measures so that, in the event that the credit is transferred to another entity (banks), these conditions are maintained.
The measure, which will be in force for two years, aims to help families adapt more gradually to the new interest rate environment.
Households with an income of less than three and a half times the IPREM (€29,400 per year) with mortgages signed before 31 December will be eligible.
They must also meet the requirement that the mortgage burden is more than 30% of their total household income, and that the instalment had 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, which is more than double that of the updated Code of Good Practices already in force.
(Fernando Heller | EuroEFE.EURACTIV.es)
Source: euractiv.com
