Spain’s United We Can proposes law to protect families from rising Euribor mortgage rates

United We Can has presented in the Congress of Deputies a bill to “protect families” from the rise in Euribor in recent months. The increase in interest rates by the European Central Bank has meant a exorbitant increase in mortgage payments of thousands of families.

To end “the benefits fallen from heaven of financial entities” (as they describe it from the Parliamentary Group of United We Can) present this law that will force banks to offer their clients the change from a variable to fixed rate mortgage, for which the bank must also offer the same or better conditions than those granted to new customers. In this way, according to the purple formation, homes will be protected from possible future increases.

In addition to offering the same or better conditions, customers they can change banks assuming the new entity the expenses of managing the modification of the mortgage. In the event that the entity that originated the mortgage contract made a counteroffer and the client accepted it, it would be the entity that counteroffered the one forced to bear the expenses mortgage.

For the party led by Ione Belarra, this law means a double protection. On the one hand, to families, since it will end, they say, with the economic uncertainty generated by the volatility of the Euribor and on the other hand, stability will be provided to the financial systemsince any family will be able to face the mortgage if the change to a fixed rate is possible.

The general secretary of training has communicated the initiative through Twitter, assuring that with this new law it is facing “to the economic difficulties that are causing thousands of families” the rise in interest rates and that “it is reporting profits ‘fallen from heaven’ to the banks”.

In June 2022, the interest rate on variable mortgages stood at 0%, and eight months later, the indicator stood at and 3.5%assuming an increase in the monthly payments of the mortgages of between 300 and 350 euros per month.

According to the report of Save The Children ‘There is no one who lives here: an analysis of the difficulties of families to pay for housing in Spain’, a 6.5% of Spanish families With or without children, they have had to delay the monthly payment of the mortgage or the rent. The Spanish data double the European Union average, which stands at 3.2%, and is only below Greece and Ireland. Spain also doubles the European Union average (4.3%) among families with children who recognize difficulties paying the mortgage.

From the department led by Nadia Calviño they remind Podemos that their initiative is already underway through the code of good practice signed a few months ago between the Government of Spain and 97% of the banking entities. However, from United We Can point out clear differences: the law proposed by the PSOE partner is neither voluntary nor temporary, but “structural”, as Javier Sánchez Serna, UP deputy, has defended at a press conference.

From the law proposed by UP “It is guaranteed that the client obtains a better agreement or can access the same conditions as a new client”. In this way, the client would not have the obligation to demonstrate that he needs to adhere to the code signed between the banking sector and the Government. On the other hand, the expenses of the mortgage change, with the UP law, would always be borne by the bank.