A handful of entities are left out of adherence to the Code of Good Practices that includes aid for middle-class mortgagees and that came into force on January 1. Among them, Andbank, and its banking agent MyInvestor, Banca March, Banco Mediolanum, Novo Banco and Triodos Bank. These entities have signed the Code of Good Practices for vulnerable families, a set of measures aimed at protecting families without resources during the last financial crisis, and which included the Royal Decree-Law of 6/2012 of March 9. To these must be added Pibank, a digital entity, and Banco Pichincha, which were not attached to the former either.
From Andbank they remember that the entity is mainly dedicated to asset and investment management and that they are not usually the first bank of reference for clients. In addition, they will point out that the type of customer profile, with a high purchasing power, would be outside the conditions included in the Royal Decree. However, from the entity they also verify that they are assessing it and remember that they can be added at any time of the year. In these same circumstances there would be Banca March. For its part, MyInvestor explains that due to its type of client it does not consider it necessary. “Despite being very competitive mortgages, the risk criteria are very high. To give an example, in the case of the ‘Mortgage without Entry’, a monthly income of 3,000 euros is required”, they explain from the neobank.
Triodos Bank, which is included in what is known as ethical banking, has not signed the Code of Good Practices for the middle classes, which are those mortgaged with incomes of less than 29,400 euros. In this sense, the entity of Dutch origin does not require a minimum salary to access its mortgage loan, but it does require that the age to pay it does not exceed 70 years and that the client’s income is sufficient to meet the payments. However, from the entity found that, although it has not yet joined, “we intend to do so soon, since we are aligned with its approach.”
In the case of Banco Pichincha, the mortgage has as a condition a minimum income of 1,000 euros if it is a single owner and 1,600 euros, if there are two, so that its mortgagees could meet the requirements for mortgage aid for the middle classes. From the financial sector, they explain that entities usually, in order not to do so, have hardly any clients in this situation or, due to size and type of client, they prefer to negotiate on a case-by-case basis.
For the Spanish Mortgage Association, low-income families or those who have signed their mortgages in the last year will be the most affected by the rise in the Euribor and, therefore, more likely to request aid. However, also from the AHE, they emphasize that a deterioration in the credit quality of the portfolios has not yet been observed, quite the contrary.
Measures collected for the middle classes
The war in Ukraine led to an unprecedented escalation of energy and food prices. This triggered inflation, which at first was considered transitory, to acquire permanent overtones and forced central banks to intervene, turning monetary policy around, with aggressive rate hikes, which does not work for the Euribor to have passed in twelve months of trade at -0.477% to end 2022 at 3%. Therefore, they were used as a perfect storm for mortgaged debtors, who, due to the lower income available due to inflation, will also have to allocate part of their income to rising installments.
This increase in mortgage payments was especially noticed by those with mortgages who began to check with the Euribor in September, but it will be the updates that are made with the data between December and March when the blow is devastating. The reason is that during the first three months of 2022 the Euribor moved at negative levels, while during the first quarter of 2023 the index to which mortgages are referenced will continue to rise. In this sense, there may be a difference in one year of up to 377 basis points, which implies an increase in the fees of almost 300 euros per month (3,600 euros per year).
As a result of this consequence, the Government and bank employers reviewed the previous Code of Good Practices, of 2012, which established a series of measures for mortgage clients without resources and, in parallel, approved a transitory regime, with a duration of 24 months. , for middle-class customers, who are in a situation of vulnerability precisely because of the impact of the rise in the Euribor on the fees. Those households whose income is less than 29,400 euros, with mortgages signed before December 31, 2022 and that in the previous four years have incurred circumstances that have made them incur economic vulnerability, could benefit from it.
In these cases, those mortgaged with income between 25,200 and 29,400 euros per year (3.5 times the IPREM) can opt for various measures, ranging from the possibility of freezing the installment for 12 months, a lower interest rate on the deferred principal and a extension of the term of the loan up to seven years and change the loan from variable rate to fixed rate. Likewise, it contemplated as a requirement that the mortgage payment be greater than 30% of the income of the family unit.