What is a floor clause?
We receive a lot of questions about the now-notorious ‘clausula suelos’ here at Rapido Claims, but by far the most common is: what is a clausa suelo?
With hundreds of thousands of Britons having purchased property in Spain over the last decade, it is a pertinent question. Also known as a mortgage floor clause or collar clause, a clausula suelo specifies a minimum interest rate that must be paid by those with a variable rate tracker mortgage.
Such mortgages typically track a certain well-known interest rate like the Euribor, which is based on the Eurozone’s average interest rate. The idea is that those paying such a mortgage are required to make higher payments when the interest rate is high, and lower payments when the rate is low.
Your mortgage clausula suelo could be forcing you to pay thousands of Euros more
However, in their anxiety to protect themselves against the Euribor declining, many Spanish mortgage lenders added these minimum-rate clauses to their agreements with their customers.
These rates were often set quite high – as much as 5.5% – so when the Euribor did start dropping to below 2% in 2009, many homeowners in Spain found themselves with much higher monthly payments than would have been the case if they did not have a mortgage floor clause.
With mortgage rates across the continent having been so low in recent years, if the loan payments for your own Spanish property have remained at the same high level for a protracted period of time, it’s well worth checking whether your contract includes a floor clause.
We are the clausa suelo claims specialists
If you suspect that your mortgage deal does indeed include a clausula suelo and you are interested in removing it, you’ll find the process very quick and easy with our Spanish mortgage claims experts here at Rapido Claims.
We have an industry-leading reputation for guiding our clients through the entire legal process of not only having their mortgage floor clause removed, but also securing the highest possible amount of compensation from the Spanish bank.
Fill in and submit our simple online form today to provide us with the details that we need to get started with your claim for bank compensation in Spain. Within a very short space of time, you could be many thousands of Euros better off!
What is a Clausula Suelo or Floor Clause?
It is a clause in a Spanish tracker mortgage agreement that requires you to pay a minimum interest rate, even when the interest rate that the mortgage is tracking – such as the Euribor – is lower.
This means that you could be paying thousands of Euros more than you should be, and the Supreme Court has agreed that many such clauses can be considered abusive.