The mortgage floor clause is a stipulation that continues to be a hot topic in banking law, affecting thousands of consumers in Spain. These clauses limit the reduction of the interest rate applied to a mortgage, preventing holders from benefiting from the fall in Euribor or other reference rates. As a result, many people have paid higher instalments than they were entitled to.
Below, as floor clause lawyers, we explain in detail what a floor clause is, why it is considered abusive, how it can affect your payments and what steps you can take to reclaim it and recover what you have overpaid.
What is the floor clause in a mortgage?
The mortgage floor clause is a contractual condition included in some mortgage credit contracts that establishes a minimum limit to the variable interest applied to the mortgage.
Although the interest on variable mortgages is usually linked to Euribor, if the interest rate falls below the limit set in the floor clause, the borrower continues to pay the percentage established by the bank. This practice has been considered abusive in many cases, as it prevents customers from benefiting from the drop in Euribor and forces them to pay a higher instalment than the market rate.
Why is the floor clause considered abusive?
Mortgage floor clauses have been declared abusive for several reasons:
How to know if your mortgage includes a floor clause?
If you have a variable interest mortgage, you can follow these steps to check if you are affected by a floor clause:
- 1. Check the mortgage loan deed
Look for terms such as “minimum interest rate“, “limit to variability” or “clause limiting the lowering of the interest rate“.
- 2. Examine your monthly bills
If the Euribor has gone down in the last few months but your instalment has not decreased, you could be affected by a floor clause.
- 3. Ask the bank for information
You can ask your financial institution for a copy of the loan deed and an explanation of the conditions applied.
- 4. Consult a lawyer specialised in mortgage floor clause
A lawyer with experience in mortgage floor clause can help you identify if your mortgage contains this limitation and advise you on the steps to follow to claim it.
How does the floor clause affect mortgage payments?
The mortgage floor clause has a direct impact on the monthly instalments, as it prevents the interest rate from falling below a set limit. For example:
- If you have a 30-year mortgage of 150,000 euros with a variable interest rate of Euribor +1% and a floor clause of 3%, even if the Euribor falls to 0%, you will continue to pay interest at 3%.
- Without the floor clause, your monthly payment could be reduced to €450, but with the clause you will still be paying €600 or more.
Over the years, this translates into thousands of euros overpaid, seriously affecting the finances of mortgage holders. As a result, many customers have filed legal claims to recover the money unduly charged.
If you suspect that your loan includes this condition, we recommend that you consult with lawyers specialised in mortgage floor clauses to analyse your case and claim what you are entitled to.
Options for eliminating the floor clause in your mortgage
If you discover that your mortgage does indeed include an unfair floor clause, don’t worry, there are several ways to remove it:
- Negotiate with the bank: You can try to ask the financial institution to remove the clause and return the overcharged interest.
- Novation or subrogation of the mortgage loan: You can modify your mortgage to eliminate the floor clause or change bank to an entity that offers better conditions.
- Out-of-court claims: Since 2017, banks are obliged to offer a mechanism to claim back overcharges without having to go to court.
- Lawsuit: If the bank refuses to remove the clause or does not offer adequate compensation, you can file a lawsuit with the support of lawyers specialised in mortgage floor clauses.
Frequently Asked Questions
Yes, as long as you can prove that the floor clause was imposed without proper information and transparency. Many courts have declared these clauses null and void and have ordered the return of the money overcharged.
In some cases, yes, you can try to negotiate with the bank or use the out-of-court complaint mechanism established by the government in 2017. If the bank does not respond favourably, you can go to court.
In order to claim the elimination of the floor clause and the return of the money paid in excess, it is necessary to gather the following documentation:
- Deed of the mortgage loan: Document detailing the existence of the floor clause.
- Mortgage instalment receipts: Especially those reflecting interest payments.
- Binding offer (if any): Document given by the bank before signing the mortgage.
- Amortisation table: shows how interest has been applied over time.
- Communications with the bank: Any document in which the removal of the floor clause has been requested or its response.
At BUFET GÓMEZ FERRÉ, we help you to compile and review your documentation in order to start the process of your claim and make it effective.
If the bank refuses, the best option is to file a lawsuit. With the support of a lawyer specialising in mortgage floor clauses in Barcelona, the chances of obtaining a favourable resolution are high, as the jurisprudence is in favour of the affected consumers.
Lawyers specialising in claiming floor clauses and mortgages – Free Initial Consultation
At BUFET GÓMEZ FERRÉ, we have a team of lawyers who are experts in claiming floor clauses and mortgages in Barcelona, with more than 25 years of experience in Banking Law, Claiming Unpaid Claims and Claiming Credits to Administrators, among other areas. When you choose us for your claim, we offer you:
- Analyse your case in detail with our free, no-obligation initial consultation, where we will accompany you throughout the process, ensuring the best strategy to recover your money effectively and securely.
- Eliminate the floor clause of your mortgage, reducing your monthly payment.
- Claim a refund of the money overpaid, with full retroactivity.
- We do not charge upfront fees: we are results-based lawyers, which means that our fees are linked to the success of the claim, and we adapt fully to the economic proposals of each client.
Free lawyer consultation at BUFET GÓMEZ FERRÉ: we will help you from our law firm in Barcelona to study the possibilities of success to recover what you are entitled to.
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