Spanish banks have expressed their willingness to join the plan to protect mortgages affected by the sudden rise in the Euribor. The sector, initially irritated with the Government for bringing the pact to the Council of Ministers without having closed all the details, moderated its position after learning that, as requested, the beneficiaries will not have to insert them in their drawer of defaulters. This point was crucial, as it would force entities to have more provisions to protect their portfolios from defaults.
“We can already announce the availability of the main entities of the Spanish Banking Association (AEB) to join the agreement,” confirmed yesterday the president of the institution, Alejandra Kindelán. This will of the entities linked to the employers’ association – in addition to those that are part of the Spanish Confederation of Savings Banks (CECA) – comes after the publication of the text in the BOE. In any case, the final decision remains in the hands of each of the banks, individually.
The idea of the Ministry of Economy is that the plan will be launched on 1 January 2023. Among the measures, those that will allow a five-year grace period for those with incomes of less than 25,200 euros and who will dedicate half of their income your income stands out against the mortgage, in addition to the freezing of the share for those who earn less than 29,400 euros and whose mortgage burden exceeds 30% of their income, among other requirements.
The plan of measures to cushion the increase in mortgages will not go free to the beneficiary families. The text of the two codes of good banking practice, published yesterday in Boe, clarifies that the reductions in the quotas will lead to an increase in the interest that the holders will pay for the entire duration of the loan. It will not happen as with the aid launched during the pandemic, when a moratorium on mortgages was approved. Now what is being done is cutting quotas or freezing them for a while, and the restructuring will incur long-term financial costs.
The Asufin association calculates, for example, that vulnerable middle-income families who take advantage of the seven-year credit extension will add around 17,000 euros at the end of the loan life. This case is calculated for a 25-year mortgage of 100,000 euros with an interest rate equal to the Euribor plus one point. As for the five-year grace period plus a Euribor rate minus 0.1 point, the total long-term cost will be €1,200.
