The Spanish left-wing government and the banks have sealed a memorandum of understanding intended to help households who have taken out variable-rate mortgages and who find themselves weakened by the rise in interest rates.
This agreement, signed late Monday evening after several weeks of negotiations, should make it possible to lighten the burden of home loans for more than a million households, the Minister of the Economy announced in a press release. It will come into effect on January 1.
Concretely, this plan includes a reduction in the interest rate for five years and an extension of the duration of the loan of up to seven years for households earning less than 25,200 euros per year and whose amount of the mortgage represents 50% or more income.
In order to also reach the middle classes, this plan will allow households earning up to 29,400 euros per year and whose loan represents more than 30% of income to benefit from an extension of the duration of their seven-year loan. The amount of their monthly payment may also be frozen for one year.
I hope that all (the banks) will subscribe to this agreement because last night, we did not have confirmation of their unanimity, nuanced Tuesday the Minister of Economy, Nadia Calvio, on Spanish public radio .
This agreement comes in the midst of a standoff between Spanish banks and the government, which wishes to introduce in 2023 and 2024 an exceptional tax on the main banking groups whose profits are boosted by the rise in rates.
A quarter of the mortgages currently taken out in Spain are subject to variable rates, revisable each year according to Euribor, the benchmark interest rate for European banks.
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But these loans have long dominated the Spanish market and 3.7 million real estate loans being repaid are still indexed to Euribor, according to the press release from the minister.
A situation considered worrying when this reference rate has risen sharply in recent months, in the wake of the increase in key rates by the European Central Bank (ECB) in an attempt to stem the rise in inflation.
Spain was hard hit in 2008 by the bursting of the real estate bubble linked to the financial crisis. The latter had forced many households to sell their homes, unable to repay their credit.