The new support that subsidizes variable interest rates (Euribor) by 50% on home loans for loans up to 200 thousand euros and for borrowers up to the sixth income bracket benefits all types of contracts, including those concluded before 2011 and which already benefit from an IRS interest deduction , announced the Minister of Finance, Fernando Medina, on Tuesday during a hearing in the parliamentary committee for Budget and Finance.
“This measure will apply to all contracts, not only those for which the 3% stress test has become mandatory”, from 2018, “but also those before 2011 that benefit from the tax deduction”, said Fernando Medina, who clarified that, in in these cases “arrangements will be made so that families can benefit from the greater of the two types of support”.
The new aid, part of the “More Housing” package that is in public consultation until March 10, has been created to mitigate the effects of rising interest rates on mortgage loans. It is aimed at credit holders for own and permanent housing with an outstanding amount of less than 200,000 euros and concluded up to and including 31 December 2022. In addition, these families must also submit a taxable income up to the 6th IRS scale (38,632 euros). .
Banks will calculate borrower stress rates and monitor whether interest rates have risen above the maximum value to which the stress test is subject. The interest is subsidized as follows:
– For an effort rate between 36% and 50%: support equals 50% of the difference between the current index and the threshold of 3% or, if higher, the threshold used to assess solvency by banks;
– For an effort percentage equal to or greater than 50%: support equals 50% of the difference between the current index and the threshold of 3% (corresponding to the index + 3 percentage points).
The support that families receive can amount to 720 euros per year (annual limit 1.5 of the Social Support Index) and is deducted directly from the installments by the banks. For example, a family that pays a mortgage of 140,000 euros and has concluded a contract with Euribor at 0% for 12 months (spread of 1%, term of 30 years) now saw the index rise to 3.6%. Here, the current housing costs rose to 718 euros, with the effort percentage increasing to 38%. The support will then be 35 euros per month (420 euros per year), according to calculations by the government. This monthly support will be deducted directly from the mortgage payment by the bank throughout 2023. Only then will the government reimburse banking institutions for the support provided.
Source: DN
