Decrete Law 19/2022 which pass the Spanish good bank practices code
1. How is Euribor concept defined? What is its current evolution? Why is it this one and not the opposite?
As follows: "index which register interest rate variation at which European banks lend money between each other".
In April 2022, this index entered positive territory. Since then it has risen from +0.013% to +3.316% -corresponding to January 1, 2023-.
This development stems from the interest rate hike decreed by the European Central Bank aimed at combating inflation.
On November 22, the Spanish government approved Decree Law 19/2022 (hereinafter DL 19/2022). This legislation seeks to protect mortgaged citizens from the risk of not being able to pay their mortgage payments.
2. The Public Indicator of Multiple Effect Income: the reference point from which born the majority of the measures of DL 19/2022
Before addressing the specific measures of the Central Government, it is necessary to explain what the "Indicador Público de Renta de Efectos Múltiples" (hereinafter IPREM in Spanish acronyim) is.
The IPREM is the base for calculate and update the various social benefits. For this reason, a large part of the benefits of DL 19/2022 are linked to this index.
For 2023 the following values have been established as follows:
Daily IPREM - 20.00 €
.
Monthly IPREM - 600,00 €
Annual IPREM - 12 payments: 7,200.00 €
Annual IPREM - 14 payments: 8.400,00 €
Do you want to know even more about the IPREM? Click here.
3. Discover the code of good banking practices
The registration of banks to the code of good banking practices (hereinafter CGBP) is voluntary. In the last point of this link you will find the list of the entities added to it (as of 04/01/23).
Households can adhere to the CBPB under three conditions:
3.1.1. Not to overcome three times the IPREM.
3.1.2. 50% or more of the monthly income must be devoted to paying the mortgage.
3.1.3. To have suffered an increase in the mortgage payment of 50%.
Citizens who meet the above three requirements will be able to:
3.1.4. Restructure the loan, during the first five years
3.1.5. Request a second debt restructuring.
3.1.6. Extend by two years the term for requesting dation in payment
3.1.7. Access to a two-year grace period on the loan (interest only), a more favorable rate during this period and an extension of the loan term of up to seven years.
Circumstances to benefit from the Additional Protocol for the "middle class":
That a household does not exceed three and a half times the IPREM 3.2.2.
3.2.2. That spends more than 30% of its monthly income on mortgage payments.
3.2.3. That the installment increased by 20%.
What new measures are available to families?
3.3.1. A one-year freeze on the mortgage payment.
3.3.2. Reduction of the interest on the grace period on the principal amount.
3.3.3. Extension of the credit term up to seven years.
During 2023 they will be in force:
3.4.1. Early repayment
3.4.2. Reduction of expenses and commissions for converting the loan from variable to fixed rate
3.5.1. Additional measure: the Bank of Spain will have to draw up a clear guide for all debtors.
Final note: the additional protocol will be in force for two years.
Today we have defined 'Euribor' and 'IPREM' but we will give you even more: click this link in order to visit our huge Real Estate vocabulary.
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