Almost all financial entities subscribe to the Codes of Good Practices to alleviate the mortgage burden

A total of 54 banks and savings banks have adhered to the new Code of Good Practices approved by the Government. The adhesion of the main banks and savings banks will allow more than 97% of mortgages to be covered.

Financial institutions have widely subscribed to the modification of the Code of Good Practices for vulnerable households and have adhered to the new Code approved by the Government, which includes a wide catalogue of measures that will make it easier for up to a million households to see their mortgage burden eased. The commitment of most banks and savings banks will allow more than 97% of mortgages to be covered.

The measures included in these codes are aimed at alleviating the financial situation of families affected by the rapid rise in the Euribor, especially those who are vulnerable or at risk of vulnerability, preserving financial stability. The application of these measures will make it easier for families to adapt more gradually to the new interest rate environment.

A total of 54 financial entities have adhered to the new Code of Good Practices approved by the Council of Ministers on November 21. This Code, already in force, includes a set of measures to alleviate the financial burden of households at risk of vulnerability due to the increase in the mortgage payment.

Households with an income of less than three and a half times the IPREM (€29,400 per year) and a recent increase in the mortgage burden of at least 30% may benefit from these measures. For all these cases, financial institutions must offer an extension of the amortisation period of up to 7 years, with the possibility of freezing the instalment for 12 months.

Likewise, all financial institutions, a total of 84, which were already adhered to the Code of Good Practices for vulnerable families maintain their commitment after the extension of the scope of action in order to adapt it to the current situation. This extension allows households with an income of less than three times the IPREM (25,200 euro per year) to 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 can take advantage of the Code with a grace period of 2 years, a freezing of the interest rate and an extension of the term of up to 7 years.

Likewise, vulnerable debtors have the possibility of restructuring the mortgage loan with a lower interest rate during the 5-year principal grace period of Euribor 12M – 0.1%, compared to the current Euribor + 0.25%. Likewise, the term to request the dation in payment of the house is extended to 24 months and the possibility of a second restructuring is contemplated, if necessary.

The application of these codes is complemented by additional measures that will be in force throughout 2023 aimed at further reducing expenses and commissions to facilitate the change from variable rate to fixed rate and the elimination of all commissions for early repayment and change of mortgage of variable to fixed rate.