More than three weeks after the state of alarm was declared in Spain, the banking and finance sector has announced new measures so that clients with economic difficulties stemming from COVID-19 can cover their mortgages and personal loans.

The different entities belonging to the Spanish Banking Association (AEB) and the Spanish Savings and Loan Confederation (CECA) have reached an agreement to issue a mortgage moratorium for individuals affected by COVID-19 who do not meet the criteria for receiving the benefits approved by the government in the Royal Decree from March 17 of this year.

What does this measure consist in?

• Up to a 12-month postponement of mortgages for primary residences; during this period, clients will only have to pay the interest and may defer payments on the principal.
• Up to a 6-month postponement of consumer loans, a longer period than stipulated in the latest measures approved by the government.

What are the conditions of this moratorium?

This is an agreement among the umbrella associations that will be voluntary for the banks and savings and loans and will be approved by the boards of each bank within the next few days.

Each bank or savings and loan must decide which criteria they will use to determine how their clients will benefit from the measure and what formula they will use for repayment of the delayed capital.

How can the delayed capital be paid back?

The different options to pay back the capital being considered include: Personal loans, extensions or modifications in mortgages or other forms yet to be defined, depending on each bank's criteria.

In any case, clients who want to benefit from this measure must notify their bank or savings and loan and provide the required documentation. More information will be released on the measures that each bank is taking within the next few days.