MADRID, 11 Dic. (EUROPA PRESS) –
The Plenary Session of Congress will debate on Thursday of this week the decree to establish a Code of Good Practices in association with banks with the aim of alleviating the rise in Euribor, an index to which 3.7 million mortgages in Spain are referenced.
The initiative will reach the Plenary of the Lower House just three weeks after its approval by the Council of Ministers. The validation of the decree law has been included in the agenda of next week’s plenary session, to which Europa Press has had access.
However, the decree has not generated a full consensus within the coalition government. And it is that Unidas Podemos has criticized the initiative, understanding that it “leaves many families out” and “it will hardly reduce the mortgage payment.” In addition, the ‘purples’ point out that the decree is based on the “gaps” and the “serious legislative deficiencies” of the Real Estate Credit Law.
Less critical was the PP, which stated that it was “necessarily in agreement” with the initiative, although it considered that the proposal fell “a little short” when compared with its own. Specifically, the ‘popular’ ones include the possibility that for those with incomes of less than 14,000 euros per year, in addition to facilitating the renegotiation of mortgage conditions, they are offered a “check” so that they can pay the installment mortgage.
The decree has the objective of alleviating the mortgage burden of more than a million vulnerable families or at risk of vulnerability due to the rise in the Euribor. It is a package that is the result of negotiations between the Government, the bank employers’ associations (AEB, CECA and UNACC) and the Bank of Spain.
For vulnerable mortgage debtors (with incomes of less than 25,200 euros per year, three times the IPREM) the Code of Good Practices approved in 2012 will be expanded and strengthened, so that they can restructure the mortgage loan with a reduction in the interest rate during the grace period of 5 years (up to Euribor -0.10% from the current Euribor 0.25).
Likewise, the term to request the dation in payment of the house will be extended to two years, the possibility of a second restructuring is contemplated, if necessary, and the term to be able to request the social rent is extended from six to twelve months.
Households with an income of less than 25,200 euros a year that dedicate more than 50% of their monthly income to paying the mortgage but that do not meet the current criteria of a 50% increase in the mortgage effort may avail themselves of the Code with a grace period of two years, a lower interest rate during the grace period and an extension of the mortgage term by up to 7 years.
On the other hand, a new Code of Good Practices is proposed to give relief to middle-class debtors at risk of vulnerability due to the increase in the mortgage payment, facilitating a more gradual adaptation to the new interest rate environment for families.
Households with an income of less than 29,400 euros per year (three and a half times the IPREM) and mortgages subscribed until December 31, 2022 that have a mortgage burden of more than 30% of their income and that has risen, to the less, 20%.
Financial institutions must offer all these cases the possibility of freezing the installment for 12 months, a lower interest rate on the deferred principal and an extension of the loan term up to 7 years.
With the aim of encouraging fixed-rate mortgages, the total elimination of commissions was also approved to facilitate the change from variable to fixed rate during the year 2023. For variable-rate loans, commissions for early repayment are also eliminated during next year. After that, the cost of converting a variable rate mortgage to a fixed rate one will be permanently reduced, from 0.15% to 0.05%.
The two Codes of Good Practices will be voluntarily adhered to by financial institutions, which will be obliged to comply with them once signed. In the event of transfer of credit to a third party, banking entities must guarantee the protection of this catalog of measures in case of transfer of credit to a third party.
