Bank of Spain Mortgage Aid: Income Limits Explained and Two Options for Easier Payments

The notable increase experienced by mortgages in recent months has been felt in the pockets of citizens. For this reason, the Bank of Spain warns of two measures that these affected parties can take advantage of to make it easier for them to comply with their obligations.

Reminds the mortgaged that the Royal Decree-Law 19/2022 includes proposals designed to ease the burden of mortgage payments. Recently, the Council of Ministers the Code of Good Practices varied so that more people could take advantage of these advantages.

The most notable thing, according to the Bank of Spain, is the increase in the income of the members of the family unit. During 2023, those whose income did not exceed 3.5 times the IPREM could benefit from this rule. This year’s flexibility allows the proposal to be expanded up to 4.5 times, which represents 37,800 euros.

The Bank of Spain explains that the aid will reach more people

The limit to benefit from this aid will be raised to 5.5 times the annual IPREM (46,200 euros) when there is a person with a disability greater than 33%. The same will happen with those who have someone in their family with a dependency or illness that prevents them from carrying out a work activity. Until 2023 the limit reached 4.5 IPREM.

The Bank of Spain also includes the improvement that those people with cerebral palsy, mental illness or intellectual disability will suffer. The limit is established at 6.5 times the IPREM (54,600 euros), compared to 5.5 times last year. Additionally, those who have physical or sensory disabilities with a recognized degree equal to or greater than 65% will benefit from this.

Requirements to benefit from mortgage aid

BeneficiaryIncome levelIncome of the members of the family unit4.5 times the IPREM (€37,800)If in the family unit any member has a disability greater than 33%, dependency or inability to work5.5 times the IPREM (€46,200)If the debtor has cerebral palsy, mental illness or intellectual disability (degree equal to or greater than 33%), or physical or sensory disability equal to or greater than 65%6.5 times the IPREM (€54,600)

The two options available

The Bank of Spain reminds that if these requirements are met, the citizen will have the possibility of benefiting from a couple of measures. This way they will have a much easier time paying the mortgage payments.

First, they are offered the option of increasing the repayment period to a maximum of 7 years. To do this, it is necessary that the mortgage payment term does not extend beyond 40 years. Another alternative, in this sense, is to establish a quota for twelve months that would be equal to that of June 1, 2022.

The second measure contemplated by the Bank of Spain is to change from a variable to a fixed rate mortgage. They also remember that those who cannot benefit from the Code of Good Practices will enjoy other advantages.

Among other things is the exemption from paying taxes when it comes to early repayments of the mortgage loan. Also the facilities to go from variable to fixed or mixed with a first tranche of at least 3 years.

2024-01-29 12:38:53
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