In a bid to assist the thousands of people struggling with mortgage payments, the legal fees involved in re-mortgaging have been waived. The decision was made last week between the government and mortgage lenders.

Currently, anyone wanting to extend the period of their mortgage receives a bill for around €300 for legal fees, at the time they can least afford it.

The scheme is to last for two years initially, and should reduce the number of people who are behind with their mortgage repayments.

It is hoped that the plan, which leaves families with a few extra euros each month to spend on consumer goods, will help Spain’s flagging economy.

Some critics state that like the €400 tax rebate, due this year, this scheme is simply putting off the inevitable, and that the government is more interested in protecting corporate financial institutions from an increase in bad debt, through irresponsible lending, than in helping the struggling homeowners.

The longer term loans will be subject to the banks discretion and homeowners will end up paying a lot more interest due to the longer period of the loan.