In the judgement ruled out on March 3, the CJEU stated that Spanish courts must determine whether the clauses are sufficiently “clear and understandable” and when that’s not the case, the IRPH must be replaced with another official supplementary index, such as the Euribor.
The EU Court of Justice warns that the clause “must not only be understandable on a formal and grammatical level, but it must also allow the average consumer – generally well informed and reasonably attentive and insightful – to be in a position to understand the specific operation of the mode of calculation of said type of interest and thus assess, based on precise and understandable criteria, the potentially significant economic consequences of these clauses for their financial obligations”.
The EU High Court clarifies that the bank should also offer information on the evolution of the index, which opens the door to the annulment of this clause due to its lack of transparency in case of non-compliance.
However, the CJEU has not declared the nullity of the index itself, leaving it up to the judges to decide whether its abusive on a case by case basis.
At Fuster & Associates, our expert team of financial solicitors advises caution and examines each case individually as we understand the key to identifying the potential abuse is analysing the conditions under which the mortgage negotiations took place and whether or not these were conducted in a transparent manner.
Do you feel there was a lack of transparency on the part of the bank during your mortgage negotiations?
In that case, please don’t hesitate to contact us.
Once we analyse your case we will determine whether it is feasible to request the replacement of the IRPH with another reference index and whether your banking entity should refund the quantities paid in excess as a result of the IRPH being applied.
To find out more about the Mortgage Loan Reference Index, please follow this link.
We want to help you navigate all the legal complexities that come with your home buying in Spain, but this article is legal information and should not be seen as legal advice.