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Information on the ‘2022 Code of Good Practices’ (CBP22) for mortgage borrowers at risk of vulnerability.
  1. 1. Who can apply for these measures?
  2. All customers who are natural persons who are at risk of vulnerability and are holders of a mortgage loan or credit on a primary residence¹ with a purchase price of less than EUR 300,000 signed prior to 31 December 2022 (inclusive).

    ¹The property must be owned by the debtor² or a third party mortgage borrower.
    ²Any person who has taken out a mortgage loan or credit.

  3. 2. What are the measures?
  4. Customers who meet the criteria established by law may apply to the Bank to modify (novate³) *** the current terms of their mortgage loan or credit based on one of the following options:

    • • Option 1:
    • Extension of the total term of the mortgage loan or credit up to a maximum of 7 years.

      In addition, you have the option to set the instalment amount to the one you would have on 1 June 2022 for 12 months. The unamortised principal corresponding to the twelve monthly instalments is the amount of principal that should have been paid according to the repayment terms of the loan prior to the modification, but has remained outstanding. This will have to be paid later and will give rise to an interest rate that will reduce the current net value of the loan by 0.5 %. In any case, with the extension of the time period, the amount of the instalment cannot be reduced below the amount being paid on 1 June 2022.

    ³Modifying novation is the modification of an obligation by which a new obligation is constructed that totally or partially modifies the first obligation. In this case the modification is conditioned by the mortgage loan or credit.

    • • Option 2:
    • Conversion of the current revisable variable interest rate into a fixed interest rate freely offered to you by the Bank. The offer must be clear, transparent and comparable, so that the holder is aware of the consequences and scope of the novation.

      For its part, the monitoring control committee provided for by law may request individualised information from the institutions on the fixed-rate offers they have submitted.

  5. In relation to the novation set out in the previous two paragraphs:

    • ▪︎ The total term of the loan may not exceed 40 years from the date it was set up.
    • ▪︎ In addition, the Bank shall bear any duties and other notarial and registry fees arising from the formalisation and registration of the changes.
    • ▪︎ The period for applying for a mortgage loan modification is 31 December 2024.
  6. 3. What are the eligibility criteria?
  7. Applicants must meet these criteria:

    • • The total income of the family unit must be less than:
      • ▪︎ 3.5 times the Multi-Purpose Public Income Index (Indicador Público de Renta de Efectos Múltiples – IPREM per annum of 14 payments), i.e. EUR 8,106.28 (IPREM) x 3.5 = EUR 28,371.98. This amount refers to 2022, for 2023 a 14-payments IPREM of 8,400 euros x 3.5 = 29,400 euros is provided for.
      • ▪︎ 4.5 times the IPREM if there is a member of the family unit with a disability of more than 33%, or who is in a situation of dependency or permanent incapacity for work, i.e. EUR 8,106.28 (IPREM) x 4.5 = EUR 36,478.26. This amount refers only to 2022, for 2023 a 14-payment IPREM of EUR 8,400 is provided for, which x 4.5 = EUR 37,800.
      • ▪︎ 5.5 times the IPREM, i.e. EUR 8,106.28 (IPREM) x 5.5 = EUR 44,584.54. This amount refers only to 2022; for 2023, a 14-payment IPREM of EUR 8,400 x 5.5 = 46,200 euros is provided for, if the applicant holding the mortgage loan or credit:
        • ◦ Has cerebral palsy, mental illness or intellectual disability with a recognised degree of 33%.
        • ◦ Is a person with a physical or sensory disability with a recognised degree of 65%.
        • ◦ The caregiver of the loan holder has a certified serious illness that makes him or her unable to work.
    • • In the four years preceding the application:
      • ◦ The household’s financial efforts to access housing have undergone a significant alteration. In particular, if the mortgage burden on household income has increased by a factor of at least 1.2, or
      • ◦ the family unit has been affected by particularly vulnerable family circumstances:
        • ▪︎ If any of the members of the family unit is declared to have a disability of more than 33%, a situation of dependency or an illness that permanently incapacitates them for work.
        • ▪︎ If in the family unit there is one or more persons living in the same dwelling who are related to the mortgage holder or their spouse by kinship or affinity up to the third degree of consanguinity and are in a situation of disability, dependency or serious illness that temporarily or permanently incapacitates them for work.
        • ▪︎ If there is a victim of gender-based violence trafficking or sexual exploitation in the family unit.
    • • The mortgage instalment is more than 30% of the household’s total net income.
  8. 4. What documentation is required?
    • - Documentation on the income received by the members of the family unit (you must present the one that relates to their circumstances):
      • ▪︎ Certificate of income. And, if this is your case, certificate of having filed the estate tax. Must be issued by the Spanish Tax Authority (AEAT) or the competent body of your autonomous community and must reflect the last financial year.
      • ▪︎ Your last three payslips
      • ▪︎ Certificate showing the monthly amount of unemployment benefits or allowances received. The document must be issued by the body managing the applicant’s benefits.
      • ▪︎ Certificate as proof of receipt of social welfare income, minimum job-seeker’s allowance income or similar social assistance aid granted by the Autonomous Communities and local entities.
      • ▪︎ In the case of self-employed workers, if you are receiving unemployment benefit, the certificate issued by the managing body showing the monthly amount you receive. The document must be issued by the relevant managing body.
    • - Documentation about the number of people living in the dwelling:
      • Family record book or document as proof of registration as a domestic partner.
      • ◦ Certificate of census registration showing the persons registered in the dwelling. The certificate must cover at least the six months prior to the time when they submit the documents proving that they are at risk of vulnerability.
      • ◦ Declaration of disability, dependency or permanent incapacity to work.
    • - Documentation related to the ownership of the goods:
      • ◦ Certificates of ownership issued by the Property Registry for each of the members of the family unit.
      • ◦ Deeds of sale of the property and of the constitution of the mortgage collateral and other supporting documents. And, if applicable to you, of the rest of the collateral or personal guarantees constituted.
    • - Certificate of compliance by the debtor(s) regarding compliance with the requirements according to the standard form approved by the commission set up to monitor compliance with the Code of Good Practices.

      If the Bank is in possession of this information or supporting documentation on any of the above points, as applicant, you need not provide it. However, in order to prove that you meet the conditions for the measure to be granted, you may authorise, expressly and in writing, for information to be obtained directly from the Spanish Tax Authority, Social Security Management Entities and Property and Commercial Registries.
  9. 5. How are novation transactions formalised?

    • When the Bank has all the necessary documentation, it will check that you meet the criteria for accessing the measure and formalising the novation.

    • Before formalising the novation transactions, the Bank will provide you with simplified information on the alternative measures you can choose to modify the conditions of the mortgage loan or credit. This information will include the economic and legal consequences of the different alternatives, as well as the conditions of the extension of the payment protection or amortisation insurance, in case you had initially taken it out with the loan.

    • Once you have chosen your option as applicant, the Bank shall provide you with a loan novation motion in a durable medium by any means that allows proof of delivery, including on-line means and electronic banking services.

    • The holders of the loan shall sign the novation agreement and, where applicable, the guarantors and endorsers. They shall do so in writing, electronically or by any other agreed system that allows their consent to be validly given. The agreement must be recorded as a public document when, in accordance with the law, it is required to be recorded in the register.

  10. 6. What other fee-related measures does Royal Decree-Law 19/2022 establish?
  11. The charging of certain fees in variable interest rate mortgage contracts is suspended following the publication on 24 November 2022 of Royal Decree-Law 19/2022. This suspension is effective from 25/11/2022 to 31/12/2023.

    Affected fees:

    • • Novation fee: in cases of transfer from variable to fixed rate.
    • • Fees for early repayment or amortisation (total or partial) of variable rate mortgage loans or credits.
  12. 7. How can I request more information and take advantage of the measures?
Finally, we remind you that the "Code of Good Practice for the viable restructuring of debts with a mortgage guarantee on habitual residences” (also known as CBP2012) has been amended under Royal Legislative Decree 6/2012 of 9 March, on urgent measures for the protection of mortgage debtors without resources, which the Bank adhered to at that time. You can view it below: