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.

Related Stories

Gold Stories

Next Story
Infrastructure Energy

Asian Energy Services Q1 FY27 PAT Rises 129 Per Cent

Asian Energy Services Limited reported a 129 per cent year-on-year rise in net profit to Rs 128 million for Q1 FY27, compared with the corresponding quarter last year.Revenue increased 135 per cent year-on-year to Rs 2.71 billion, supported by continued momentum across its services business, disciplined execution and contributions from domestic and international operations. EBITDA grew 81 per cent year-on-year during the quarter.As of June 30, 2026, the company’s standalone order book stood at Rs 17.54 billion, with around 60 per cent coming from oil and gas services and 40 per cent from min..

Next Story
Infrastructure Urban

BioBTX to Build First Commercial-Scale Circular Chemicals Plant

Dutch circular chemistry technology developer BioBTX is building what it says will be the world’s first commercial-scale plant to convert mixed plastic waste into high-quality aromatic chemicals using its proprietary Integrated Catalytic Cracking Process (ICCP) technology.The facility will be built at Chemical Park Delfzijl on the northern coast of the Netherlands and is expected to create 35 jobs. Covestro, which has been a shareholder and strategic partner of BioBTX since 2024, holds a mid-single-digit million-euro investment in the company.BioBTX’s ICCP technology uses catalytic pyrolys..

Next Story
Real Estate

Awfis Q1 FY27 PAT Jumps 140% as Revenue Rises 27%

Awfis Space Solutions reported a 140 per cent year-on-year rise in consolidated profit after tax (PAT) to Rs 240 million for Q1 FY27, compared with Rs 100 million in the corresponding quarter last year.Revenue from operations increased 27 per cent to Rs 4.25 billion from Rs 3.35 billion, while EBITDA rose 28 per cent to Rs 1.62 billion. EBITDA margin improved to 38.2 per cent from 37.8 per cent. Profit before tax increased 135 per cent to Rs 240 million.The company's co-working business recorded 27 per cent year-on-year growth, supported by demand from enterprises, Global Capability Centres (G..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement