# Caixabank proposes sector-wide freeze in variable mortgage costs, source says
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-10-12
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Spain's Caixabank proposes mortgage payment freeze for
Meta Description: Caixabank, Spain's biggest lender, suggests pausing payment increases on variable mortgages for 12 months to assist struggling homeowners.
URL: https://financedigest.com/caixabank-proposes-sector-wide-freeze-in-variable-mortgage-costs-source-sayshtml

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MADRID (Reuters) – Caixabank, Spain’s biggest lender by domestic assets, has proposed a sector-wide measure to cushion the rise in payments on variable mortgage contracts for a year, a source with direct knowledge of the matter said on Tuesday. “The proposal foresees freezing the increase in payments on variable mortgages for twelve months,” the source said on condition of anonymity, confirming a report in Spanish newspaper El Periodico de Catalunya. The source said that the proposal was being debated among lenders and could still change. It was not clear how many [banking clients could benefit](https://www.financedigest.com/online-banking-benefits-and-risks-of-managing-your-finances-online.html "Online banking: benefits and risks of managing your finances online") from such a measure.The [Spanish banking](https://www.financedigest.com/over-e2000000-already-won-in-2017-against-6-spanish-banks-by-costaluz-lawyers.html "Over €2,000,000 already won in 2017 against 6 Spanish banks by CostaLuz Lawyers") association (AEB), the country’s economy ministry and Caixabank declined to comment. The association for [savings banks](https://www.financedigest.com/wyelands-bank-launches-market-leading-savings-account-to-support-trade-industrial-growth-and-job-creation.html "Wyelands Bank launches market-leading savings account to support trade, industrial growth and job creation") CECA, of which Caixabank is a member, was not immediately available for comment.

Caixabank is the market leader in the [mortgage business in Spain with a 25.4% share as of June](https://www.financedigest.com/uk-mortgage-approvals-hit-lowest-since-june-2020.html "UK mortgage approvals hit lowest since June 2020"). If [approved by the government](https://www.financedigest.com/gecko-governance-launches-compliance-solution-for-ico-market-following-approval-by-isle-of-man-regulator.html "GECKO Governance Launches Compliance Solution For ICO Market Following Approval by Isle of Man Regulator"), the proposal could also affect other lenders such as Santander, BBVA and Sabadell.

Santander, BBVA and Sabadell were not immediately available for comment.

Vulnerable households in Spain are currently struggling to cope with higher [interest rates](https://www.financedigest.com/ecbs-centeno-says-interest-rate-close-to-peaking-if-no-new-shocks.html "ECB’s Centeno says interest rate close to peaking if no new shocks"). Last week, Economy Minister Nadia Calvino said the government would [continue to work in “coming weeks”](https://www.financedigest.com/neptune-continues-liquidity-expansion-in-first-few-weeks-of-2017.html "Neptune continues liquidity expansion in first few weeks of 2017") with lenders to help the most vulnerable mortgage holders. Among the [options being weighed](https://www.financedigest.com/stanchart-weighing-options-including-sale-of-aircraft-lessor-unit.html "StanChart weighing options, including sale, of aircraft lessor unit") is an increase in the number of families that would be entitled to switch from variable-rate mortgage contracts to those with fixed rates without additional costs, bankers and a government source said also on condition of anonymity. An industry-wide code of good practice already allows for the restructuring of [mortgage](https://www.financedigest.com/mortgage-refinancing-how-to-refinance-a-home-loan.html "Mortgage Refinancing: How to refinance a home loan") loans and even the cancellation of outstanding loan entirely in some cases.

Last Friday, Calvino said the government and the [banking sector were considering reviewing its relief measures and potentially bolstering some of them to address the new challenge](https://www.financedigest.com/5-things-to-consider-when-choosing-a-challenger-bank.html "5 Things to Consider When Choosing a Challenger Bank") triggered by higher interest rates. In Spain around three-quarters of the population are homeowners, with most opting for floating-rate mortgages that now leave them more exposed to a more aggressive [rises in borrowing costs in the euro zone](https://www.financedigest.com/euro-zone-economic-sentiment-rises-in-january-to-seven-month-high.html "Euro zone economic sentiment rises in January to seven-month high").

(Reporting by Jesús Aguado; Editing by Aislinn Laing and Paul Simao)


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