A recent European Commission recommendation which may be of relevance to many mortgage holders, concerns the floor interest rate inserted into mortgage terms.
For many years, the banks in Spain introduced a minimum rate of interest into the mortgage terms offered to clients. In many cases the client wasn´t made fully aware of the implications of this clause. In recent years, the Euribor reference rate has been at a very low level but many homeowners have not benefited from this due to the presence of a floor clause in their agreement.
Refunding floor clauses:
The Supreme Court in Spain had previously passed judgement against 3 banks, BBVA, Abanca & Cajamar, and ruled that the floor clauses were abusive. However, the ruling only stipulated that overpayments made since May 2013 should be refunded.
The new European Commission statement insists that as the floor clause has been deemed abusive, then refunds should be made from the date the clause was invoked.
The case is now with the European Court of Justice and the banks in Spain are waiting for the final decision with trepidation. The refund of overpayments would likely run into several billion Euros.
What can we do to help you?
GB Abogados will provide updates on this subject as and when available.
Please feel free to contact us if you would like any advice in relation to this subject. We would be happy to check your mortgage deeds and inform you of your best actions.