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Clausula suelo: Mortgage floor rate clause ( minimum interest clause). It is legal?. How to claim against Spanish bank for interests charged back.

Dear Readers ,

A mortgage or interest floor rate (clausula suelo) is a clause included by most banks in loan agreements secured by mortgage. It sets a minimum rate of interest. These clauses limit any possible fall in the level of interest rates, which normally are linked to the Euribor.

As we have said in previous articles, although these clauses could be legal, each case much be studied individually, because according to Consumers regulations, this limitation on interest must be informed and accepted properly by you, the consumer.

Therefore, if you have a mortgage loan, it needs to be checked on your deed (escritura) to see if there is any floor rate clause, which normally will state that the interest to be paid could not be lower than x%. If you cannot find such a clause, we can review the deed for you.

If there is one of theses clauses on your loan agreement, you need to know that:

1.- This limit of the level interest reduction must be informed and negotiated with the you as the consumer before going to the notary. Therefore it should be part of the binding offer ( oferta vinculante) which you should have signed and agreed to before you went to the notary and signed for the loan.

2.- A determining factor to decide if your floor rate clause is abusive or not, could be if on the same loan agreement there is a top rate clause (clausula techo). In this case, it needs to be checked to see if the top rate clause and the floor rate clause are proportionate or not, and if there is a reciprocity or lack of it, between the minimum and maximum possible interest rates.

A lack of reciprocity, lack of proportionality, need of the binding offer, etc. have resulted in court rulings in favour of the consumer, such as from the Province Audience of Alicante, in Orders number 368/2012 of 13th September, and the Court Order number 58/2012 of the 10th of February.

If you have a mortgage, and wish to make sure your rights as a consumer are protected, White Baos Lawyers can confirm this for you, without the need of any payment or fee. This is done by reviewing your Mortgage Loan Deed, to see if you have a INTEREST FLOOR RATE. If so, we can advise if we think it is abusive or not, and whether you have real chance to get it declared null and void.

As per above, if you have a mortgage, feel free to send us a scanned copy to our general email and we will inform you.

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

White & Baos
Tel:+34 966 426 185
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