The Minimum Interest Rate Charged
Article supplied by Welex, March 2016
Here we briefly and simply explain the main issues concerning the minimum interest rate charge on a mortgage in Spain – the so-called “cláusula suelo”.
Related to the mortgage loan and the property purchase by mortgage, this contractual clause stipulates a minimum amount payable to the bank, even though the ordinary interest rate that has been agreed with the financial institution is now lower or is decreasing.
This clause only benefits the bank. The lower the interest rate, the less a client should have to pay, but in establishing this clause the banks ensure a minimum charge. In other words, it does not allow the debtor to benefit from a fall in the index.
It is also possible that the bank includes a “cláusula techo” (roof clause), which limits the maximum interest rate a debtor would have to pay the bank if the index rose considerably. However, banks tend to set this above the usual market value, so this “roof clause” does not become effective – and is in fact exorbitant.
Although the application of these clauses may be in accordance with the law, in most cases they are unfair due to lack of transparency, or not reporting their presence and their consequences.
The “cláusula suelo” applies to mortgages of variable interest rate (in Spain the Euribor is often used as a reference), which represent most of the mortgage loans made in Spain.
To find out if your mortgage in Spain contains the “cláusula suelo”, you should check the mortgage loan deed and determine if any of the following expressions appear in it:
- “límitemínimo del tipo de interés del (…) %”
- “límites a la variedad del tipo de interés”
- “tipo de interésremuneradoaplicable”
- “tipoaplicable de interésordinario”
- “tipo de interés nominal”
- “enningúncaso el tipo nominal anualpodráser inferior al (…) %”
Our company carries out a preliminary study of your Spanish mortgage and, if your legal case is highly feasible, we can help you remove any “cláusula suelo” from your Spanish mortgage loan, enabling you to benefit from a lower interest rate and receive a refund of amounts over-charged.