The Belgian banking sector has developed a support scheme for households and companies facing payment difficulties due to high energy prices by allowing payment deferrals on home loans under certain conditions, announced sector federation Febelfin on Thursday.
By allowing payments to be postponed, no capital repayments need to be made for 12 months on the condition that they have less than €10,000 in moveable assets at the time of application and are not registered as defaulters.
"Many Belgians today wonder how they can continue to pay their increasingly higher energy bills on top of their fixed expenses. The postponement of mortgage repayments proposed by the banks should provide the necessary oxygen to those who need it to get through the winter," said Prime Minister Alexander De Croo in a press release.
"The current energy price crisis requires efforts from everyone. In that context, it is really important to be able to count on our banks, as during the Covid-19 period."
What does this mean?
In practice, the duration of the loan will be extended by the period of the payment deferral, meaning that the borrower will repay their loan 12 months longer than initially agreed. The interest remains due but banks will not charge the usual administration fees.
For companies, the sector aims for a tailor-made solution, with Febelfin emphasising that companies that face financial difficulties due to the high energy prices should contact their bank.
According to the Chair of Febelfin Johan Thijs, the Belgian banks want to provide maximum support to their customers. "By acting quickly, we as a sector succeeded in developing a package of measures in a very short period of time and to have it come into effect on 1 October."
This should ease the pressure on family or business budgets for a year, pending a normalisation of energy prices and geopolitical conflicts being resolved. At the same time, Febelfin calls on all economic actors (not only banks) to offer some form of support to families and companies in difficulty.
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"With winter just around the corner and skyrocketing energy prices many families and companies face an uncertain financial future. As a financial sector, we will take up our social role in solidarity, just like during the Covid-19 crisis," added CEO Karel Baert.
Therefore, the banks want to provide maximum assistance to those who are having an especially hard time, and in this way, help provide an answer to the consequences of this energy crisis.
"Exceptional times require exceptional efforts. The support measures we outline today will benefit those who need it most," said Baert. "All bank employees will do their utmost to assist everyone as best as possible."
Those who want to request a deferral of their future (monthly) payments can request it from 1 October 2022 until 31 March 2023. More information about the payment deferrals can be found on Febelfin's website.
