The government is looking to extend measures to support vulnerable mortgagors and remove commissions that allow consumers to change their variable rate loan for a fixed rate or amortise capital to save interest in 2024.
According to El País, the Ministry of Economic Affairs has already informed the main financial employers' associations (AEB, CECA and Unacc) of its intention to extend these measures, which were approved at the end of last year and currently expire on 31 December, for a further year. On 18 December, the government will meet with the Bank of Spain and the banking employers' associations to assess the extension and try to reach an agreement before the end of the year and before Nadia Calviño takes charge of the European Investment Bank (EIB).
In November last year, the government approved Royal Decree-Law 19/2022, to alleviate the financial situation of vulnerable families or those at risk of vulnerability due to the rise in interest rates and the Euribor, with up to one million households as potential beneficiaries, according to the government's estimates at the time. One of the measures was to remove the commissions for early repayment and change from variable to fixed-rate mortgages, which initially was due to expire this year.
According to the first additional provision of the text, "From the entry into force of this Royal Decree-Law and until 31 December 2023, no compensation or fees shall accrue for total or partial repayment or early repayment of mortgage loans and credits at variable interest rates provided for in the cases referred to in Sections 5 and 6 of Article 23 of Law 5/2019, of 15 March, regulating real estate credit contracts. No fees shall accrue during this period for converting these loans and credits from variable to fixed rates".
Thus, the only cost that has fallen on the consumer in a transaction of these characteristics from November 2022 until now has been the property appraisal, as banks are obliged to assume the notary, registry and agency fees. However, in many cases, financial institutions also cover the appraisal's amount, provided that the financing transaction goes ahead.
The agreement that Economía is trying to reach is to extend for 2024 the free changes from variable to fixed mortgages, as well as to point out that these measures also include modifications to mixed loans, a modality that has become very popular in the market in recent months, and about which the royal decree did not expressly mention.
Added to this is the extension of eliminating fees for early repayment of loans, a measure that has benefited any family wishing to reduce their mortgage debt to save interest, regardless of their income level.
Another of the points on the negotiating table is to increase the income limit for households to qualify for the Code of Good Practice, the protocol allowing them to make loan payments more flexible, from the current €29,400 to €37,800.
Specifically, it establishes that banks must offer families that meet the conditions described the possibility of a 12-month freeze on repayments, a lower interest rate on the deferred principal for 12 months or an extension of the loan term of up to seven years. Increasing the income limit was one of the points agreed between PSOE and Sumar in the run-up to the formation of the new government.
If the Executive and the banks finally reach an agreement, the changes must be approved through a decree before 31 December. This is the date that some of the measures expire, such as free mortgage changes or early repayment without paying a penalty.
Article seen in (El País)
El Gobierno presiona a la banca para ampliar las ayudas a los hipotecados en ap…
Buying in Spain? Key facts about the property market
If you're thinking about buying a home, it’s essential to understand the current state of the property market. Should you wait, or is now the time to buy? To help you decide, we analyse the key indicators: price trends per square metre, interest rates, the Euribor, transaction volume, mortgages, and available financial aid.
Urgent property sales in Spain
Buying property in Spain is a dream for many, but the process can sometimes be lengthy and costly. With the year drawing to a close, there’s no better time to secure your ideal home and potentially benefit from great deals before 2025 ends. Urgent property sales offer a fast, cost-effective way to find exceptional opportunities within days or weeks.
Americans, Portuguese, Moroccans and Ukrainians buying more homes in Spain than ever
The latest data from Spanish notaries on property purchases by foreign buyers has revealed several records. Not only did foreigners pay the highest average price on record for properties during the first half of the year, but as many as seven nationalities also bought more homes than ever before on the Spanish market.
Spanish party Vox proposes higher taxes on foreigners to fund housing aid for Spaniards
Vox, a right-wing political party in Spain, has submitted a proposal to Congress to increase taxes on foreign property buyers. The money raised would be used to fund tax breaks for Spanish citizens and to support the construction of affordable housing.
Spain's most beautiful autumn destination, according to National Geographic
Spain is full of destinations to explore in autumn, when mountains and forests turn golden and nature’s magic feels more vivid than ever. It’s the perfect season to escape the summer crowds and immerse yourself in towns rich in history, culture and sample local fare.
American entrepreneur to revive abandoned Spanish village as tourist destination
Salto de Castro, a village in Zamora that has lain abandoned for more than 30 years, is set for a remarkable comeback thanks to American entrepreneur Jason Lee Beckwith. He has purchased the small border settlement with Portugal for €310,000 and plans to transform it into a tourist hub offering accommodation, dining, and leisure in a natural setting.
