Last November, Nadia Calviño, First Vice President and Minister of Economic Affairs and Digital Transformation, announced a package of measures for those most vulnerable families that have a mortgage. Specifically, the measures aim to improve the situation of vulnerable families, create some guidelines for middle-class families at risk of vulnerability and establish measures to all mortgages in general.
All these measures come as a result of the current economic situation, which is drowning thousands of families with mortgages. The Euribor experiences strong increases that have an impact on the prices of variable-rate mortgages, which for years have been the preferred option for Spanish buyers.
The confidential
These measures have been adopted by almost all financial institutions. In total, 54 banking entities They are already applying these aids to the mortgaged. They are regulated by Royal Decree Law 19/2022, of November 22, which modifies Royal Decree Law 6/2012, of March 9, on urgent protection measures for mortgage debtors without resources. The package of measures is divided into two large groups: those with very vulnerable mortgages and another group for mortgagees with low incomes.
Measures for vulnerable mortgagees
Vulnerable mortgagors are those families with incomes of less than 25,200 euros per year, a mortgage on a home of up to 300,000 euros and with a payment that exceeds 50% of the net household income and with an increase in this rate of 50% in recent years. Steps they can take to lighten the load include:
- The applicable interest rate is reduced during the 5-year grace period in the payment of the principal of the mortgage, going from Euribor plus 0.25% to Euribor minus 0.10%.
- Possibility for families to request the restructuring debt on several occasions.
- The term to request the application is doubled to 24 months. dation in payment of habitual residence.
- The term to apply for social rent in one’s own home is extended from 6 to 12 months to the financial institution, for a maximum amount of 3% of its value by people in a situation of vulnerability who are subject to a situation of eviction from their habitual residence.
- Vulnerable households that have not experienced a 50% increase in the mortgage burden may also benefit from the Code, in this case with a grace period of 2 years in principal payment, a lower interest rate during that period and the possibility of extend the term of the mortgage up to 7 years.
Measures for mortgaged individuals with incomes of less than 29,400 euros
On the other hand, the measures for families with income less than 3.5 times the Public Indicator of Multiple Effects Income (IPREM), about 29,400 euros per year, who have to face a mortgage payment of more than 30% of their income and who have experienced an increase in this mortgage burden of at least 20%, may request the following:
- possibility of freeze the quota for 12 months.
- possibility of interest rate reduction applicable to the principal that is deferred and an extension of the loan term of up to 7 years.
The measure may benefit more than 700,000 families
As indicated in Moncloa, among the initiatives approved, others are included aimed at further reducing all the costs of converting mortgages from variable to fixed rates and eliminating commissions for early repayment and conversion during 2023. In addition, the Bank of Spain will develop a guide for distressed mortgagors, and monitoring of the application of both codes will be strengthened.
Last November, Nadia Calviño, First Vice President and Minister of Economic Affairs and Digital Transformation, announced a package of measures for those most vulnerable families that have a mortgage. Specifically, the measures aim to improve the situation of vulnerable families, create some guidelines for middle-class families at risk of vulnerability and establish measures to all mortgages in general.