These are the mortgage measures to benefit a million homes

taketonews

The Council of Ministers will approve this Tuesday a package of measures to alleviate the mortgage burden on more than a million vulnerable households or at risk of vulnerability due to the increase in the Euribor.

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The measures act in three ways: the treatment of vulnerable families is improved, a new temporary framework of action is opened for families at risk of vulnerability and improvements are adopted to facilitate the early amortization of credits and the conversion of mortgages at permanent.

VULNERABLE FAMILIES

  1. Measures are collected that improve the current Code of Good Practices for vulnerable mortgagees, approved in 2012, in order to adapt it to the current situation, thus giving the option to restructure the loan with a lower interest rate during the 5-year principal grace period (Euribor minus 0.1% versus the current Euribor plus 0.25%).

  2. Extends to 2 years the term to request the dation in payment of the house and the possibility of a second restructuring is contemplated, if necessary.

  3. Households with incomes of less than 25,200 euros per year that dedicate more than 50% of their monthly income to paying the mortgage may benefit from the Code with a grace period of 2 years, a lower interest rate during the grace period and an extension of the term of up to 7 years. For example, a family with a typical mortgage of 120,000 euros and a monthly installment of 524 euros after the interest rate review, will see its installment reduced by more than 50% during the five-year grace period, to 246 euros.

MIDDLE CLASS FAMILIES AT RISK

  1. A new Code is also proposed to alleviate middle-class families, with incomes of 29,400 euros per year, who are considered at risk of vulnerability due to the increase in the mortgage payment, which consumes more than 30% of their income after a rise of at least 20%.

  2. For all these cases, financial institutions must offer the possibility of freezing for 12 months of the quota, a lower interest rate on the deferred principal and a extension of the term of the loan up to 7 years.

ADDITIONAL MEASURES

  1. I know will further reduce expenses and commissions to facilitate the change variable rate to fixed rate and commissions for early repayment and change of mortgage from variable to fixed rate will be eliminated throughout 2023.

The two Codes of Good Practices will be voluntarily adhered to by financial institutions and mandatory once signed.

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