CONVEYANCING & PROPERTY
abusive & unlawful mortgage clauses: spanish floor clauses
Due to poor regulation in the last three decades, the Spanish banking sector has traditionally been offering mortgages containing abusive and illegal clauses within their terms and conditions forcing millions of clients to pay higher mortgage repayments than that which is allowed by Spanish and EU Consumer Laws.
It is estimated that one in every two Spanish mortgages contains an illegal clause even though many individuals are still unaware of this. For Spain, the issue has been similar to the PIP scandal in the UK.
The Mortgage Floor Clause, better known as "Clausula Suelo" or "Suelo Hipotecario", is essentially a clause that has been inserted into variable rate mortgage agreements in Spain during the last 20 years that affects the interest rate payable on the mortgage. For most Spanish variables rate mortgages, the interest rate payable is calculated by reference rate to the EURIBOR (the Euro Interbank Offered Rate) .
Under these mortgages, if the EURIBOR index increases, then the interest on the mortgage also increases. However, if the EURIBOR index goes down, mortgage holders do not fully benefit from the fall as the mortgage agreement stipulates there will be a minimum rate of interest payable on the mortgage regardless of the EURIBOR rate (also known as a "suelo" or "floor"). The level of the floor will depend in the bank providing the mortgage and when the mortgage was taken out, but it is typical too see floors of 3 to 4%. The Bank therefore always wins.
This clause has now been deemed illegal and unfair by both the Spanish and European courts and constitute an ‘abusive’ practice against consumer. It is estimated that there are more than 3.5 million mortgages with these types of clauses.
If you have previously taken a mortgage in Spain, you could be entitled to a large compensation. We are happy to review your mortgage deed without any obligation.
Many individuals, particularly expats, aren’t aware that they have agreed to a Floor Clause, let alone that they are able to claim back compensation. This is where the help and guidance from professionals like us can assist your case, enabling you to claim back the overpayments you have made throughout the life of your mortgage.
Our Solicitors will review your mortgage without obligation and identify any illegal clauses within. If you qualify we will advise you of the same and offer our services should you wish to proceed.
With a wealth of knowledge in the sector, we have won many cases against banks, producing optimum levels of success rates for every client. We offer a first-class service which focuses solely on our clients. We work closely with clients to understand their individual requirements and achieve the best outcome.
If you would like to talk to us about your mortgage, call us today on (+34) 952 78 04 54 or contact us online or email us at [email protected] for a free consultation without any obligation and we’ll get back to you as quickly as possible.
It is estimated that one in every two Spanish mortgages contains an illegal clause even though many individuals are still unaware of this. For Spain, the issue has been similar to the PIP scandal in the UK.
The Mortgage Floor Clause, better known as "Clausula Suelo" or "Suelo Hipotecario", is essentially a clause that has been inserted into variable rate mortgage agreements in Spain during the last 20 years that affects the interest rate payable on the mortgage. For most Spanish variables rate mortgages, the interest rate payable is calculated by reference rate to the EURIBOR (the Euro Interbank Offered Rate) .
Under these mortgages, if the EURIBOR index increases, then the interest on the mortgage also increases. However, if the EURIBOR index goes down, mortgage holders do not fully benefit from the fall as the mortgage agreement stipulates there will be a minimum rate of interest payable on the mortgage regardless of the EURIBOR rate (also known as a "suelo" or "floor"). The level of the floor will depend in the bank providing the mortgage and when the mortgage was taken out, but it is typical too see floors of 3 to 4%. The Bank therefore always wins.
This clause has now been deemed illegal and unfair by both the Spanish and European courts and constitute an ‘abusive’ practice against consumer. It is estimated that there are more than 3.5 million mortgages with these types of clauses.
If you have previously taken a mortgage in Spain, you could be entitled to a large compensation. We are happy to review your mortgage deed without any obligation.
Many individuals, particularly expats, aren’t aware that they have agreed to a Floor Clause, let alone that they are able to claim back compensation. This is where the help and guidance from professionals like us can assist your case, enabling you to claim back the overpayments you have made throughout the life of your mortgage.
Our Solicitors will review your mortgage without obligation and identify any illegal clauses within. If you qualify we will advise you of the same and offer our services should you wish to proceed.
With a wealth of knowledge in the sector, we have won many cases against banks, producing optimum levels of success rates for every client. We offer a first-class service which focuses solely on our clients. We work closely with clients to understand their individual requirements and achieve the best outcome.
If you would like to talk to us about your mortgage, call us today on (+34) 952 78 04 54 or contact us online or email us at [email protected] for a free consultation without any obligation and we’ll get back to you as quickly as possible.