Decision day for the one million floor clause mortgages in Spain that may have paid an average of €25,000 too much

Decision day for the one million floor clause mortgages in Spain that may have paid an average of €25,000 too much

This week, finally, Spain’s Supreme Court will rule on mortgages that were linked to an IRPH rate, more than six months after Europe left it to the Spanish judges to rule on their legality or lack of transparency. While the standard Euribor rate has been negative since February 2016, the mortgages linked to the IRPH have been paying interest at around 2%. It is estimated that the average cost of overpaid interest payments to these clients could be around 25,000 euros each. The Supreme Court validated the use of the IRPH in 2017, but Court number 38 of Barcelona raised a preliminary question to Europe to enquire about the control […]

Do you have a mortgage in Spain? Find out if you are owed money by your bank…

Do you have a mortgage in Spain? Find out if you are owed money by your bank…

‘Abusive’ IRPH floor clause mortgages in Spain: A Costa del Sol court ruling obliges the banks to return everything overcharged – before the national Supreme Court rules on the matter. A judgment of the Provincial Court of Malaga has declared the IRPH mortgage rate null for ‘lack of transparency’, replace it with Euribor and orders the banks to refund the difference between the cancelled rate and the new one plus interest. The recent ruling of the Court of Justice of the European Union (CJEU) regarding the IRPH rate mortgages in Spain is so clear that many provincial courts and hearings have decided not to wait for the Supreme Court to […]

Mortgage floor clauses in Spain: Key aspects of the Supreme Court ruling

Mortgage floor clauses in Spain: Key aspects of the Supreme Court ruling

Spain’s Supreme Court, in a Judgment of May 9, declared the nullity of the floor clauses in the mortgages of certain banking entities due to lack of transparency. What is a floor clause? When you go to a bank to apply for a mortgage loan, you tend to analyse what interest rate (fixed or variable) is the one that may be most convenient when paying the bank for the different instalments. In the fixed-rate, the same instalment will always be paid from month to month. In the variable rate, the instalments to be paid usually consist of the application of a reference index set by the European Central Bank (normally […]

Spanish mortgage victory leaves British couple with €15,000 in their pockets thanks to bank compensation payout

Spanish mortgage victory leaves British couple with €15,000 in their pockets thanks to bank compensation payout

Once upon a time a happy English couple (let’s call them the Smiths) who worked very hard in Birmingham all their lives dreamed of buying a property in Spain. One day they decided they had ‘had enough of rain, beer and fish and chips’ and decided to come to Spain to change it for sun, sangria and paella. But they were not 100% sure about it… it was, after all, a big move in their lives, but you only live once, so they booked their flights to Spain. They fell in love with Spain at first glance and their people and agreed to go ahead with the purchase of a […]