Agreed by the Council of Ministers, the interest rate that applies to subsidized housing (VPO) shall be reviewed annually.

Before starting to develop everything about interest rates and mortgages that are charged on subsidized housing , it is a short introduction about the features, in which groups are classified and access requirements.

Subsidized housing

Also known as Housing Public Protection or simply subsidized housing, is a type of housing that is awarded by lottery to anyone who is registered in the Register of Applicants for subsidized housing.The subsidized housing must meet the requirements in the State Plan of subsidized housing (the latter is that which corresponds to the period 2009-2012). One of the main features, regardless of the subsidies provided by public administration, is that the price is substantially lower than it would on the open market housing. Also, another key issue is that once awarded, should be the permanent address of residence of the winner.


Requirements to qualify for a subsidized housing

Without detailing matters more concrete, since the intention of this paper is to provide general information about subsidized housing and mortgage or interest rate applied to them, note that there are two fundamental requirements for a citizen eligible for one of them: that their income is framed within the so-called as low income and do not appear in the Land Registry as the owner of another property.

Should also clarify the fact that the developer or builder who is allotted a plot for the construction of subsidized housing must meet the same way as does the final winner, with a series of requirements and / or legal, such as not selling the house above the maximum price set by the Administration. As the sponsor receives benefits that would highlight the financing of much of the construction of housing interest rates really low. If the owner wanted to sell your home, the price would be fixed by the administration, that is, an owner of a subsidized housing can not leave the open market and sell the flat at the price you want. However, there is a period of time after which, the house happens to be free, thus being able to sell at the desired price.

Direct and indirect aid to subsidized housing

The direct state aid to the Entry (SAFE) is an amount of money the state gives the ultimate owner in order to assist or facilitate the payment of the price of housing is not funded by the loan. Is calculated by taking into consideration a range of indicators, such as the income received by the owner, if it belongs to a large family, if you bring all or most of the income to housing, etc. On the other hand, as we would find indirect support grant loans, defined as such to the amount of money the state provides the owner with the purpose of subsidizing mortgage interest for a maximum period of 10 years. That is, for an owner who is paying for example, EUR 400 monthly mortgage, if the state subsidizes the mortgage with 50 euros per month, would end up paying 350 euros.

Interest rates on subsidized housing

It is the interest rate that applies to mortgages for such housing and the result is calculated using the average IRPH (Reference Indexes Mortgage Loans) of the last three months multiplied by a coefficient. As discussed earlier in this article, is decided by the Cabinet and reviewed annually, therefore, faced with the question that often occurs, are not financial institutions who impose it.

State Housing Plan

At first glance, taking into account the current situation, we see how these interest rates are somewhat higher than the mortgages based on Euribor (interest rate at which financial institutions lend money) plus differential, the latter relevant to the entity financial. This is due to the global economic situation, as expected when the situation returns to normal, the Euribor return to previous levels, around 3.5-4%. For the current State Housing Plan 2009-2012, the interest rate is Euribor published last month prior to the finalization of the loan, which will apply a spread of between 0.25 and 1.25 basis points.