Economy announces a plan for “middle class” families of up to 29,400 euros of annual income and vulnerable of 25,200
The Ministry of Economy announced late this Tuesday a package of measures to ease the mortgage burden of “more than a million homes vulnerable or at risk of vulnerability” due to the increase in the Euribor. The department that directs Nadia Calvino has made this announcement “in the absence of closing the last details“from the negotiation with the employers banks (AEB, CECA and UNACC) and the Bank of Spain and after hours of complex meeting at the headquarters of the ministry. The measures, which will be approved by the Minister council this Tuesday for the January 1they will be of voluntary membership by the entities and forced compliance once subscribed.
As EL PERIÓDICO announced, the Government has snatched from the bank a double plan. On the one hand, it expands and “reinforces the relief” for households covered by the Code of Good Practice 2012 for the restructuring of mortgages vulnerable customers. And in parallel, it will create a new code for “middle-class families” at risk of vulnerability.
As this newspaper also advanced, the restructuring measures more forceful are still reserved for the first, while for the second group initiatives are going to be deployed that seek ease the financial burden. In addition, measures will be adopted to facilitate the conversion of the type of credits from variable to fixed and the early amortization of credits.
The new code for middle classes will benefit households with lower annual income three and a half times the IPREM (29,400 euros per year) and mortgages subscribed until December 31 2022, a mortgage burden higher than the 30% of your rent and let there be uploaded at least 20%. Entities must offer them the possibility of freeze the quota for 12 months (as proposed by CaixaBank, as revealed by this newspaper), a lower interest rate on the deferred principal and a extension of the term of the loan for up to seven years.
Code Renewal
As for the 2012 code, several of its measures have been improved. On the one hand, vulnerable debtors will have the possibility of restructuring the mortgage with a lower interest rate during the period of lack of the principal of five years (euribor -0.1%, compared to the current Euribor +0.25%). It is also extended to two years the deadline for request dation in payment of the house and the possibility of a second restructuring in necessary case.
is also going to expand your scope of acting. Thus, households with an income of less than €25,200 per year (three times the IPREM) who dedicate more than 50% of their monthly income to paying the mortgage, but do not meet the current criteria of a 50% increase in the mortgage effort, may avail themselves of the Code with a two year grace perioda lower interest rate during the deficiency and a extension of the term up to seven years. A family with a typical mortgage of 120,000 euros and a monthly installment of 524 euros after the interest rate review, will see their installment reduced by more than 50% during the five-year grace period, up to 246 euros.
Finally, there is a third package of measures of a general type for the common mortgage holders. Thus, expenses and commissions will be further reduced for easy type change variable at a fixed rate and will be eliminated throughout 2023 the commissions for early repayment and exchange from variable to fixed rate mortgage. In addition, measures will be included in the plan to promote the financial education and will reinforce the tracing of the application of both codes.
reluctance
The announcement has arrived a day later of deadline given by the economic vice president, Nadia Calvino, to the bench last week. It proves what complex what have been the talks. The banks have tried until the last moment to minimize the impact of the measures in their results accountssince they will force them to higher provisions against possible future losses due to non-payment. Thus, on the one hand they have fought for reduce as much as possible area of application of the agreement, that is, they have tried to make the requirements that must be fulfilled by potential beneficiaries are as restrictive as possible. In a similar vein, the Bank of Spain had claimed to focus the plan on the “most vulnerable groups” and had warned that the opposite could affect the price and flow of new credit.
Through their AEB employers (banks) and MINT (former savings banks), likewise, the sector has also tried to prevent term extensions and deficiencies from causing a increased interest charge, as Calviño claimed. These measures lower monthly payments that families must pay, but they suppose a increase in the final price of mortgages unless otherwise regulated. Thus, more interest is paid because it is the longest term or because it is the highest outstanding capital once the grace period ends, while a novation of the credit with the consequent commission (normally 1% of the outstanding capital).
Customer Ombudsman
Related news
As this newspaper announced, the Council of Ministers this Tuesday also plans to give the green light to the creation of the Independent Administrative Authority for the Defense of Financial Clientswith which the Ministry of Economy intends to revolutionize the current public system for resolving claims to banks, insurance companies and investment firms.
The two fundamental aspects of the bill they will not vary in principle with respect to the preliminary draft of last April. So, their decisions will be binding for entities (not for clients) when the amount claimed does not exceed 20,000 euros and the new organism will be financed with a rate 250 euros per claim received that the entities will pay.