Multi-currency mortgages are another of the products marketed by banks in Spain which have ruined entire families. In this type of mortgage the Spanish bank instead of handing over the amount of the loan in Euros, does it in a foreign currency, usually in the currency of different countries like Switzerland (francs), Japan (yen), etc.<\/p>\n
RISKS: <\/span><\/strong>Unfortunately the risks and costs for the consumer of this type of mortgage loans are numerous and very high.<\/p>\n The main risk lies in the fluctuation and variation of the exchange rate.<\/span><\/strong><\/p>\n Imagine that your income is in euros, but the currency of your loan is in francs. Depending on the price of the franc in the foreign exchange market, you will pay more or less Euros each month for your monthly mortgage payment. In addition, this exchange rate also affects the outstanding or pending capital that remains to be paid on the loan, i.e. if the franc increases, the equivalent of what you must pay Euros also increases, unfortunately this is what has happened.<\/span><\/p>\n Real examples of this risk:<\/span><\/strong><\/p>\n 1) In January 2015, the National Bank of Switzerland stopped setting the minimum change of 1.20 francs per euro, which led to a revaluation of the franc of 30%. People with a multi-currency loan in francs, in a single day had to pay a monthly loan payment 30% more expensive, and their outstanding capital in euros was 30% higher.<\/p>\n 2) This office is defending some consumers with a loan in francs. The franc has revalued 60% during the time of the loan, so that after 10 years paying their mortgage monthly payments (approximately 200,000 €) now they owe more money in Euros than what they received from the bank in the first place.<\/p>\n Duty of information<\/span><\/strong>: We have found that the main problem is that the banks that marketed this product did not correctly report about the risks to their clients. The product is as unpredictable and as risky as the foreign exchange market. In addition, the clauses in the deeds of multi-currency loans are not usually transparent, it is not clear to the consumers the potential economic and financial consequences and risk of what they are signing.<\/p>\n