If you live in a home of your own property and you have a mortgage
1. What is the moratorium of mortgage instalments?
The moratorium is an instrument that permits adjourning the payment of mortgage instalments during the decreed State of Alarm. The suspension of the payment of monthly mortgage instalments has been approved for a period of three months, extendible by the Council of Ministers.
2. Who can apply for the moratorium of mortgage instalments?
- The potential beneficiary is a mortgage debtor who is in one of the cases of economic vulnerability set forth in Royal Decree-Laws 8/2020 and 11/2020, provided the loan or credit agreements guaranteed with a property mortgage have been entered into for the purchase of:
- The habitual residence.
- Buildings associated with economic activities performed by entrepreneurs and professionals.
- Homes other than the habitual residence which are being let and for which the individual mortgage debtor, proprietor and lessor of these homes has ceased to receive the rent since the entry into force of the State of Alarm decreed by Royal Decree nº 463/2020 of 14 March, or ceases to receive it until one month after the termination of the State of Alarm.
- These same measures also apply to the principal debtor’s guarantors and sureties in regard to their habitual residence and in the same conditions as those laid down for the mortgage debtor.
3. Can my application for a moratorium of mortgage instalments be rejected?
No. It is obligatory. The application must be accepted and processed, and the grant of the moratorium can only be rejected if the established requirements are not fulfilled.
4. On how many instalments can I apply for the moratorium?
The suspension of the payment of monthly mortgage instalments has been approved for a period of three months, extendible by the Council of Ministers.
5. How do I have to return the amounts adjourned with the moratorium?
They must be returned on a pro-rata basis during the remainder of the life of the loan once the State of Alarm has terminated. This must be agreed in a notarial document once the State of Alarm has terminated.
6. In what conditions do the amounts of the suspended instalments have to be returned?
The moratorium entails:
- The non-accumulation of interest during the suspension period.
- The non-collection of default interest.
- The non-application of the early maturity clause. The adjourned instalments are not considered matured.
7. What requirements have to be fulfilled to apply for the moratorium of mortgage instalments?
The applicant must be in a situation of economic vulnerability, that is to say, meeting each and every one of the following requirements:
- That the potential beneficiary becomes unemployed, or in the case of entrepreneurs, or professionals, suffers a substantial loss of income or a substantial reduction of invoicing of at least 40%. To the effects of this Article, the consideration of entrepreneurs and professionals is given to individual persons who fulfil the conditions laid down in Article 5 of the Value Added Tax Act nº 37/1992 of 28 December.
- That the sum total of the family unit in the month prior to the application for a moratorium does not exceed:
- 3 Times the monthly IPREM (Public Multiple-Effect Income Indicator). This limit will be increased by 0.1 times the IPREM for each dependent child (in the case of single-parent family units it will be increased by 0.15 times the IPREM per child), and by 0.1 times the IPREM for each member of the family unit over 65 years of age.
- 4 times the IPREM if one or more members of the family unit is certified a degree of disability greater than 33%, or is in a situation of dependence or illness which in a certified manner permanently disables them from any work activity. This limit will be increased by 0.1 times the IPREM for each dependent child (in the case of single-parent family units it will be increased by 0.15 times the IPREM per child).
- 5 times the IPREM if the mortgage debtor suffers from cerebral palsy, mental illness or intellectual disability, with a recognised degree of disability equal to or greater than 33%; is a person with physical or sensorial disability, with a recognised degree of disability equal to or greater than 65%; or suffers from a serious illness which in a certified manner disables that person or their carer from performing any work activity.
Reference: 1 monthly IPREM
3 monthly IPREM
4 monthly IPREM
5 monthly IPREM
- That the mortgage instalment, plus the expenses and basic supplies of the family unit’s habitual residence (electricity, gas, heating oil, running water, landline and mobile telecommunication services and community fees) is equal to or greater than 35% of the net family income.
- That as a consequence of the sanitary emergency, the family unit has suffered a significant alteration of its economic circumstances in terms of effort of access to housing. It is understood that a significant alteration of the economic circumstances has occurred when the effort represented by the sum total of the mortgage burden, understood as the sum total of the mortgage instalments of the properties referred to in Article 19 of RDL 11/2020 on family income, has multiplied by at least 1.3.
8. What is understood by “family unit”?
The household composed by the debtor, his/her spouse not legally separately or a registered civil partner and the children, regardless of their age, who live in the home, including those linked by a relationship of wardship, guardianship or foster care.
9. How do I have to apply for the moratorium of mortgage instalments?
The application must be submitted either online or in person to the financial institution with which the mortgage loan or credit was signed. The website of each institution contains a specific form which must be presented along with the specific documentation..
10. Where do I have to apply for the moratorium of mortgage instalments?
At the financial institution where the mortgage loan or credit was signed.
11. What documentation do I have to present to apply for the moratorium of mortgage instalments?
- Certification of loss of income:
- Certificate of unemployment benefit, with the monthly amount.
- In the case of being an entrepreneur or professional and having ceased the activity, the certificate of declaration of cease of activity issued by the Inland Revenue Agency (AEAT) or the competent body of the Autonomous Community.
- Certification of persons living in the home:
- Family register or certifying document of civil partnership.
- Collective municipal registration certificate (minimum 6 months). You can carry out this formality by calling 010.
- Declaration of disability, dependence or permanent incapacity for work activity, if applicable.
- Certification of ownership of the property:
- Simple note from the index service of the Land Registry of all the members of the family unit. The request for the simple note for certifying the situation of unforeseen social and economic vulnerability can be sent by e-mail to the Land Registry in which your home is registered or, as the case may be, to any of the Registries of the municipality where you have your habitual residence, attaching of necessity a photocopy of the National Identity Document of the person for whom the information is to be issued, or, as the case may be, of all the members of the family unit.
- Deeds of sale of the habitual residence, the rented home or the building associated with the economic activity, if this is the case.
- Granting deed of the mortgage loan or credit.
- If the mortgage moratorium is requested for a home being let (Art. 19.c):
- Rent agreement.
- Sworn declaration of the debtors that they comply with the established requirements.
12. What happens if I cannot obtain one of the documents required to certify the situation of unforeseen economic vulnerability?
In the event that the applicant is unable to provide one of the documents, this may be substituted by a sworn declaration including the express justification of the reasons related with the consequences of the Covid-19 crisis which prevent their presentation. After the termination of the State of Alarm and any extensions of it, the applicant will have one month to submit any documents which have not been provided.
13. How is the moratorium of mortgage instalments formalised?
It will be formalised in a public deed, the notarial and registry expenses being on the financial insititutions' account. This deed is not subject to Transfer Tax and Stamp Duty (IAJD). During the period of the State of Alarm, no deeds can be formalised, due to the restriction of personal mobility.
14. Until when can I present the application for a moratorium of mortgage instalments?
APPLICATION PERIOD: Until 9 May 2021.
15. When does the moratorium of mortgage instalments begin to count?
GRANT PERIOD: It will take effect from the moment the sol·licitud accompanied by the documentation that evidenced the vulnerability of the deutor is present.
16. Does the formalisation of the application for a moratorium of mortgage instalments have any cost?
Yes. The expenses are on account of the creditor, in this case the financial institution. It is exempt from Transfer Tax and Stamp Duty (IAJD).