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No mortgage aid for non-residents

Friday, November 07, 2008

Source: Catherine Deshayes

The Spanish Government has announced that the unemployed can defer mortgage repayments but this won't apply to non-resident home owners...

The Spanish Government has announced this week that it will help families who are struggling to make mortgage payments, in light of the economic problems the country is currently facing due to the global credit crunch.

Prime Minister José Luis Rodríguez Zapatero said that as the economy braves hard times, his Government will pay special attention to lower-income families and the jobless.

Under the new measures unemployed workers will be able to defer half of their monthly mortgage payment, with a limit of £403, for up to two years.

To qualify borrowers must be unemployed or self-employed with financial problems. They must have a mortgage of less than £136,775, taken out before September 1st this year.

However, as Mark Stucklin of Spanish Property Insight points out this will not help the holiday home market on the coast, where most foreigners buy.

Mortgages on second homes and property investments are excluded from the plan, so non-resident holiday home owners on the costas will not be among the 500,000 mortgage borrowers who are expected to benefit.

Spanish banks have welcomed the proposal, which will help reduce their rapidly rising mortgage default rates, as the Government will guarantee all deferred mortgage repayments.