Are you affected by a multicurrency mortgage loan? Is your loan linked to the change between Euro-Swiss Franc, Euro-Yen, etc?

Multi-currency mortgages are apparently normal mortgage loans, but instead of operating in Euros, they are linked to other foreign currencies. Offered by banks normally to high income customers, as a formula to benefit from the changes between currencies, in practice it has caused to those affected enormous economic damage. This is because usually the evolution of the exchange rate between the Euro and the chosen currency has been unfavorable. These loans are usually linked to currencies like the Swiss franc, etc.

Some of those affected do not even know that they are affected, as they are unaware that the capital of their loan is linked to another currency.

Legally it is possible to claim against the bank, and request cancellation of the clauses relating to the linkage to foreign currency, since the bank did not inform consumers of the potential risks of these financial products. In addition, these loans are not referred to the normal interest, rather, like the Euribor which is the most common, instead they are normally referred to the Libor, which is an unusual and controversial interest rate.

On many occasions not only are those affected paying higher than expected monthly repayments to the bank, but also, if the change of currency is unfavorable, often the consumer could owe now even more capital in Euros than that which was agreed at the beginning of the loan, despite having spent many years paying the mortgage.

Many Spanish courts, including the Supreme Court in its judgment of June 2015, have pointed out that these types of loans are complex financial instruments, and therefore the bank is required to provide greater protection and information to non-expert consumers.

Although these contracts are not in themselves illegal, the lack of sufficient and accurate information to consumers who contract them, outlining the potential risks of the product, could mean that there is no real knowledge by consumers and therefore the consent given when signing is not valid, which could lead to a declaration of invalidity for lack of transparency.

It is important that the affected are consumers, ie individuals or companies not acting in the exercise of their profession, trade or business. It is important to consider product knowledge, experience in similar investments, and training and qualifications of the affected.

And there are many judgments in favor of the consumers affected by these types of multi-currency loans, including among others, the judgment of the Provincial Court of Palma de Mallorca, Judgment 122/2011 of 5 April 2011.

It is estimated that there could be anywhere between 30,000 and 60,000 such affected cases at this moment in Spain.

If you have a mortgage in Spain linked to another currency (other than the €) contact us.


The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.

Carlos Baos (Lawyer)

Spanish Law firm solicitor attorney barrister.

Alicante, Denia, Costa Blanca Marina Alta

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