Bank of Spain delays mortgage relief decision
ECONOMY & POLICY

Bank of Spain delays mortgage relief decision

Bank of Spain Governor Pablo Hernandez de Cos expressed his view that, currently, there seems to be no necessity for banks to potentially prolong mortgage relief measures for vulnerable households, given the limited utilisation by citizens thus far.

Last week, Prime Minister Pedro Sanchez of Spain announced that the new coalition government was considering raising the annual income threshold for qualifying for mortgage relief support to 38,000 euros ($41,283) as part of a broader set of measures aimed at assisting families in coping with increased borrowing costs.

Speaking at a financial event in Madrid, De Cos stated, "In this central scenario, where the economy is still slowing down but could see a recovery in 2024, we find no need to amend the code of good practice."

As per the updated industry-wide code of good practice, Spanish banks are now expected to offer mortgage support to vulnerable families earning less than 25,200 euros per year. Additionally, middle-class families with an income of less than 29,400 euros, at risk of defaulting, would also receive extra protection.

Approximately three-quarters of the Spanish population own homes, making them particularly vulnerable to an increase in interest rates, as over 70% of their more than 4 million outstanding mortgage loans carry variable rates.

The average cost of a mortgage in Spain rose to 3.84% as of August, compared to 2.03% in the same month in 2022.

In November 2022, the Spanish government approved mortgage relief support for over one million vulnerable households. However, as of the first seven months of 2023, only 42,000 requests have been submitted, according to data from the Bank of Spain.

De Cos noted, "We have observed that the use is still limited, and our assessment of this fact is that the economy has been performing reasonably well. We have all been surprised by the strength of the labour market."

Bank of Spain Governor Pablo Hernandez de Cos expressed his view that, currently, there seems to be no necessity for banks to potentially prolong mortgage relief measures for vulnerable households, given the limited utilisation by citizens thus far. Last week, Prime Minister Pedro Sanchez of Spain announced that the new coalition government was considering raising the annual income threshold for qualifying for mortgage relief support to 38,000 euros ($41,283) as part of a broader set of measures aimed at assisting families in coping with increased borrowing costs. Speaking at a financial event in Madrid, De Cos stated, In this central scenario, where the economy is still slowing down but could see a recovery in 2024, we find no need to amend the code of good practice. As per the updated industry-wide code of good practice, Spanish banks are now expected to offer mortgage support to vulnerable families earning less than 25,200 euros per year. Additionally, middle-class families with an income of less than 29,400 euros, at risk of defaulting, would also receive extra protection. Approximately three-quarters of the Spanish population own homes, making them particularly vulnerable to an increase in interest rates, as over 70% of their more than 4 million outstanding mortgage loans carry variable rates. The average cost of a mortgage in Spain rose to 3.84% as of August, compared to 2.03% in the same month in 2022. In November 2022, the Spanish government approved mortgage relief support for over one million vulnerable households. However, as of the first seven months of 2023, only 42,000 requests have been submitted, according to data from the Bank of Spain. De Cos noted, We have observed that the use is still limited, and our assessment of this fact is that the economy has been performing reasonably well. We have all been surprised by the strength of the labour market.

Next Story
Building Material

Suraj Estate Wins Euromoney Award for India’s Best Residential Developer

"Suraj Estate Developers Limited has received the Euromoney Real Estate Award 2025 for ‘India’s Best Residential Developer’, positioning the company among globally benchmarked leaders in the sector. The recognition reflects its four-decade legacy in delivering high-quality residential and redevelopment-led projects across South Central Mumbai. The Euromoney Real Estate Awards, presented by the London-based Euromoney magazine, are widely regarded as one of the most credible global assessments of performance in real estate, banking and finance. Winners are selected through surveys of inte..

Next Story
Building Material

Lloyds Metals, Tata Steel Sign MoU to Explore Strategic Collaboration

"Lloyds Metals and Energy Limited has signed a non-binding Memorandum of Understanding with Tata Steel Limited to evaluate potential areas of strategic cooperation across mining, logistics, pelletisation and steelmaking. The MoU was signed by B Prabhakaran, Managing Director of Lloyds Metals, and Mr T V Narendran, CEO and Managing Director of Tata Steel. The partnership framework aims to leverage the natural operational synergies between both companies and assess opportunities in greenfield steel projects, iron ore mining, slurry pipeline infrastructure, pellet manufacturing in iron ore–ric..

Next Story
Building Material

IndiaAI, Gujarat Govt Host Regional Conclave Ahead of 2026 AI Summit

The IndiaAI Mission under the Ministry of Electronics and Information Technology, along with the Government of Gujarat and IIT Gandhinagar, convened a Regional Pre-Summit Event at Mahatma Mandir, Gandhinagar. The initiative is part of the build-up to the India–AI Impact Summit 2026, scheduled for 15–20 February 2026 at Bharat Mandapam, New Delhi. The conclave brought together senior policymakers, technology leaders, researchers and industry practitioners to examine how AI can accelerate economic, digital and social transformation across sectors. The programme focused on the overarching th..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Open In App