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What is the floor clauses?
The Floor Clauses is a clause incorporated by banks in mortgages which sets a minimum interest rate to be paid in monthly installments, irrespective of the market interest. With it, the bank is therefore guaranteed to collect that minimum amount, although Euribor (European benchmark interest rate) is below this minimum.
- Judgment from the European Union Court of Justice.
In this judgment, passed on the 21st December 2016, the European Union Supreme Tribunal declared that the banks must repay the excessive interest paid by customers affected by floor clauses dating from when the mortgage was first signed.
- What can be recovered?
Using an amortization table, the interest paid to the bank is calculated as if the floor clause never existed; therefore the excess interest that was paid since the mortgage was first signed can be claimed. In addition you can also claim: Expenses for constituting the mortgage. (Namely: Notary costs, management, taxes and evaluation. For a mortgage of €150,000 this would be €3,000 approx. The legal interest on all claimed amounts.
- Who can claim?
Any person who signed a mortgage between the years 2001 and 2012 can claim and whose monthly installments did not fall in recent years as the Euribor has.
- Legal route for the claim.
It is likely that anyone affected will receive an offer from the banks to settle the issue. We would recommend that you be very cautious with such offers as they may not be of real benefit to you. It is always better to consult a lawyer before accepting any offer, as the maximum amount to be recovered is only possible by going through a lawyer who will file a legal claim.
Floor clauses which were included in Spanish mortgages
Restriction on interest rate changes:
- Standard interest may never exceed 15% of the nominal annual interest.
- In the case of ordinary interest, the applicable interest rate must never exceed 12 % nor fall below 2.5 % of the nominal annual interest rate.
Documents and details needed for our first analysis
- Name and surname.
- Tax identification number.
- Copy of the notarial certified mortgage documentation (simple copy) .
- Copy of the bank notification about the loan’s payment timeline with a list of interest and capital payment .
- If there is one: previous communication with the bank relating to mortgage floor clause or in this context written information received from the bank
- Declaration that no other lawyer has been entrusted with this case