Individuals who are financially affected by the new coronavirus (Covid-19) crisis can freeze mortgage repayments for a maximum of six months, Federal Minister of Finances Alexander de Croo and president of Febelfin Johan Thijs announced on Tuesday.
Payment deferral measures have also been put in place for business loans. Together with de Croo, Febelfin has specified the practical details of the deferrals in two separate charters.
For private individuals, the deferral of mortgage loan payments implies that a borrower does not have to repay his credit (capital and interest) for a maximum period of six months. Interest accrued during this deferral will be paid thereafter. In addition, banks will not charge the usual administrative or handling fees. Moreover, borrowers with a net monthly income of less than 1,700 euros will be able to defer payments without needing to pay interest.
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As for companies, the deferment of payment of the business loan means that they will not have to repay the capital for a maximum period of six months and they will not be charged the usual administrative or handling fees. However, businesses still need to pay interest.
"With this agreement, the financial sector is making an important effort to avoid that mortgage borrowers, the self-employed, non-profit organisations and companies will be confronted with cash flow problems," de Croo said.
"Now that our country, like many others, is severely affected by the consequences of the corona pandemic, we, as financial institutions, are more than ever taking on our social role in solidarity. We want to provide maximum assistance to our clients (private individuals, the self-employed, companies and organisations) who are experiencing additional difficulties, and in doing so we want to assume our responsibility in helping to solve this unprecedented crisis. Exceptional times require exceptional efforts," said Thijs.
Jason Spinks
The Brussels Times
