! Murcia Today – Spanish banks plan to freeze mortgage repayments for 1 year to cushion cost of living crisis

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Euribor interest rates have risen more than 3% over the past year, pushing homeowners to make their monthly mortgage payments

Spanish banks are considering freezing mortgage repayments for a year to cushion the impact of rising interest rates.

This is one of the measures that the sector plans to present, which has called on entities to seek formulas to help the debtors most in difficulty.

This proposal was presented by CaixaBank as a suggestion to the Spanish Ministry of Economic Affairs to support people who have mortgages with Spanish banks and are having difficulty paying.

Last year, the Euribor, which banks use as a benchmark for mortgage rates, climbed to 2.6% from -0.5% just a year ago. This sharp rise in interest rates is affecting the ability of many homeowners with adjustable rate mortgages to make their monthly mortgage payments.

So far, the proposal to freeze reimbursements for one year has been positively received by the other institution, but no final decision has yet been taken as there are also other proposals and discussions are still ongoing. In any case, sources assure that it is currently the most widely accepted measure.

It’s also not a definite proposal at this time. It has not yet been specified from when the freeze will be applied and at what interest rate, and several other issues remain to be resolved before it can be put into practice.

Gonzalo Gortázar, CEO of CaixaBank – one of the four largest banks in Spain along with Santander, BBVA and Sabadell – assured that “a good part” of this bank’s customers, at least, will not suffer an increase in the cost of their mortgage loans because seven out of ten loans signed over the last six years have been fixed rate rather than variable rate, protecting these customers from fluctuations in the Euribor.

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