Spanish Mortgages – Floor Clause, “Clausula Suelo”

Do you have a Mortgage on your Spanish property? You could be entitled to a refund of thousands of Euros.

Following a judgment of the European Court of Justice on 22nd December 2016 you may be able to claim compensation from your bank if you have a mortgage containing an unlawful “Floor Clause”.

What is a Floor Clause?

Many Spanish tracker mortgages were linked to a variable interest rate such as the European Borrowing Rate (Euribor).

A lot of these mortgages had a Floor Clause which meant that even if (as it did) the official interest rate the mortgage was tracking, dropped to a very low level, the customer’s mortgage was stuck at a minimum rate, the 'floor rate’ that was higher. This meant people were, and in some instances still are, paying much more than they should have been.

The Law

In May 2013, Spain’s Supreme Court ruled that mortgages of this type provided by BBVA, Cajamar and NCG were “abusive” but banks were not initially ordered to refund customers.

In April 2016 a Madrid judge went further and decreed that 40 of Spain’s biggest lenders had to pay back borrowers the extra interest paid on mortgages dating back to 2013.

The more recent ruling in December 2016 by the European Court of Justice ordered that there should not be a time limit on how far back you can claim and banks should pay back all of the interest you overpaid.

This YouTube video from Euronews explains in more detail, the case against the Spanish banks.

How much compensation could I receive?

If you have one of these mortgages, you can now claim for the wrongly charged interest you overpaid going back to 2008 in many cases.

The losses could be €200 or more per month on a mortgage of €150,000 which means that claims could be as high as €20,000.

If you believe you may have a mortgage with a floor clause, Sarah Waddington Legal will review your mortgage deed free of charge, advise you if you are able to claim and approximately how much compensation you could receive. Click here to contact our Spanish Mortgage team directly.