What is a mortgage moratorium?
It is the deferment of the payments for a mortgage for a period of time.
The decree was approved on March 17, 2020. Royal Decree-Law 8/2020 was published, on extraordinary urgent measures to face the economic and social impact of COVID-19 (https://www.boe.es/buscar/pdf/2020/BOE -A-2020-3824-consolidated.pdf)
If you are not Spanish and are thinking about applying for the moratorium, it will depend on the applicable categories you fall under, as mentioned below:
1. I am a foreigner and I do NOT officially reside in Spain
If you are not a resident in Spain you will not be able to request the mortgage moratorium, but you still have other possibilities. Some Spanish banks (example: Banco Sabadell) are giving loans to cover mortgage payments for 6 months, and are to be paid without interest or commissions and for up to 5 years.
Obtaining a loan under these conditions will put money in your account to cover the mortgage payments for the next six months, which would create relief to your payments
2. I am a foreigner, but I am permanent resident in Spain
You can request the moratorium if the mortgage is to finance your primary residence (non- vacation home) and you are currently unemployed or if you are an entrepreneur who suffered a substantial drop in your sales or income (of more than 40%) due to the actual pandemia.
In addition to meeting the above mentioned requirements, you will also need to fulfill the following…
- The monthly family income in the month prior to the request of the moratorium does not exceed three times the monthly IPREM (€ 1,613.52). This figure can be expanded in cases of dependent children or persons over 65 years of age, or in cases where there are members of the family with a disabiality greater than 33% measured.
- The mortgage payment plus basic necessities is greater or equal to 35% of the net income of the family unit.
- And when as a result of the health emergency, the mortgage burden on family income has increased more than 30%.
What documents do I need?
- Certificate of unemployment benefits that you are getting, if you are unemployed
- If you are self-employed, a certificate issued by the “Agencia Estatal de la Administración Tributaria” (State Agency of Tax Administration or the competent body of the Autonomous Community) with a declaration of cessation of activity
- Number of people living in the house:
- Family book or document confirming a domestic partnership.
- Registration certificate relating to people registered in the home
- Declaration of disability, dependency or permanent incapacity to carry out a work activity.
- Ownership of the house:
- Simple note from the property registry index
- Deed of sale of the home and the mortgage-backed loan document
- Document with a declaration of not having enough financial resources to pay the mortgage
What is the application deadline?
The request can be submitted from March 19 and up to 15 days after the end of the Royal Decree Law
When will the moratorium apply?
Within a maximum period of 15 days after it’s approved and would imply the deferment of the mortgage installments for the duration of this pandemic crisis
Where should I apply?
At the bank that granted you the mortgage in Spain. Some of the spanish banks has an online tool where you could check if the moratorium is applicable to your situation, e.g: to access the simulator for Bankia (one of the biggest spanish banks) click here