The banks have decided to extend the terms of the moratorium on the payment of the loans that clients have who are affected by the current economic and labor situation derived from the impact of the coronavirus. The set of entities will double the time during which the holders of your mortgages or loans for consumption, they can stop paying their quotas, with respect to the calendar approved by the Government in its economic and social aid package.
This measure will benefit “those people economically affected by the situation generated by COVID-19”, explain the employers of the sector (AEB and CECA) in a joint initiative. It is a “additional and complementary” action to those approved in the last Councils of Ministers, whose decrees demanded a series of requirements. If the banks follow those criteria of the Executive, as the statement published yesterday points out, the self-employed could also be accepted under certain conditions published in the BOE.
In the case of mortgages – as long as it is a habitual residence – the entities will apply a postponement of up to 12 months, compared to the six months imposed by the Executive in its plan. Measure is limited to the capital of the credit, which is usually the most important part of the share, even more in this context of interest rates at historical lows. The financial cost, that is, the interest, will have to continue paying them. In any case, the entities consider that “it will allow families to face the situation with more liquidity”.
The Economy mortgage moratorium allowed this postponement for half a year, to citizens affected by the economic impact of the coronavirus, with five conditions at once: be unemployed (or cease business); that the family income does not exceed 22,554 euros a year (home without children); the credit share (plus basic expenses and supplies) is less than 35% of the family’s income; and, lastly, that the effort represented by the mortgage burden on income has been multiplied by at least 1.3 times in the current context.
It also expands to six months the moratorium period in the case of other types of credits whose payment must face families who are experiencing financial hardship in these weeks. That measure was also incorporated by the Council of Ministers, with a three-month moratorium in which payment could be postponed. The entities extend this possibility up to half a year, also in the case of capital. The entities consider that this option “will significantly reduce” the amount of money that they had been paying until now, since this type of credit the weight of the interest is proportionally much greater than in mortgages.
Points to clarify
The employers clarify that the postponement will be implemented “according to the cases and depending on the criteria of the entity “, through a personal loan, a mortgage loan modification, or other financially equivalent formula. The councils of the AEB and CECA will approve in the next few days the agreement in which this initiative will be embodied, and which will specify its conditions and procedural aspects.
Since the coronavirus crisis began, banks they had already announced different solutions to help to those who are experiencing the worst and have expressed their willingness to collaborate with the measures adopted by the Government to mitigate the economic effects of this situation. For this reason, the measure announced yesterday is voluntarily assumed by each entity, and does not overlap other actions for the same purpose that Spanish entities have.