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European Banks will have to Tighten their Financing of Second Homes From 2021

The European Banking Authority has approved a credit guide that will make the banks more strict when it comes to financing second homes and preventing money laundering.

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The European Banking Authority (EBA) has changed the lending policy for banks and has recently approved a new guide with key changes: new criteria for branch bonuses, closer monitoring of real estate appraisals, greater prevention of money laundering and the tightening up of the rules for granting mortgages for second homes, amongst others.

The change in the rules for mortgages for second homes could be decisive for a real estate market already affected by the Covid-19 crisis. The fall in GDP and the fact that many families are considering giving up their second homes to work from home is concerning the sector. What’s more, now from mid-2021, financial entities are going to be more demanding when it comes to granting this type of mortgage, according to El Confidencial.

Read the full article in Spanish.

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