What’s the maximum amount you should have in a current bank account in Spain?

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Three in every four mortgages taken out in Spain are variable rather than fixed rate, so as interest rates rise many people are currently finding it difficult to keep up with payments. 

In November 2022, the Spanish government announced a deal it had made with the country’s banks to help alleviate the effects that high-interest rates are having on variable mortgage bills.

The first step is to see if you qualify for government help, which is available to families who earn less than €25,200 per year. 

READ ALSO: How Spain will help homeowners with rising variable mortgage rates

Patricia Suárez, president of the Association of Financial Users (ASUFIN), urges people not to struggle in silence and to make sure they talk to their bank straight away if they’re having problems or think they won’t be able to make their payments. 

“Since the mortgage law was approved, banks have the obligation to facilitate measures that allow debt to be restructured,” she explained.

She also adds that despite the fact that the Minister of Economy and First Vice President of the Government Nadia Calviño “already announced that they were going to put measures on the table to force banks to give facilities to customers, in part, they already exist and consumers should take advantage of them”.

Part of what Suárez is referring to is the Code of Good Practices which has exisisted since the Rajoy government in 2012 and includes measures such as:

  • Being allowed to pay only the interest on your loan for five years.
  • Having the maximum interest on your loan limited.
  • Having the period in which to pay back the loan extended to 40 years. 

READ ALSO: How to get a mortgage in Spain if you don’t have a job contract

What if the bank is unable to provide a solution?

If you have been to the bank and they were unable to offer you a solution to help make your monthly payments or you don’t qualify for government help for variable mortgages, it’s important to visit the bank again to make a stronger case. 

“The bank is bound by law. You can consult a consumer association to provide you with the regulations and the obligations of the bank to offer a solution,” argues Suárez.

“Banks would be committing suicide if they did not make it easier for their clients to pay their mortgage, because they already learned the lesson of the financial crisis [of 2008],” she adds. 

How long can I go without paying my mortgage before the bank will repossess my house?

If you really have been unable to come to some type of solution or new plan with your bank, then you do have a bit of time before the bank will repossess your home. This may enable you to bide your time to come up with the money. 

According to Suárez, per the new regulations, you will have a period of six months to a year. 

During the first six months, the bank should offer you restructuring measures, but they can’t start the foreclosure process until a year has passed. 

What if I’m thinking of buying a home and taking out a mortgage now?

Obviously, this will be up to individual financial and personal circumstances as to whether you should invest in or buy a property in Spain right now. 

The latest data from Spain’s National Statistics Institute (INE) shows that housing prices are not increasing so quickly now, but interest rates are. 

This means that many people can take the opportunity to set a price and take out a mortgage at a fixed rate, so they know they can make payments.

“It is more important to know what you will be paying over the next 20 or 30 years,” concludes Suárez.