What is the floor clause?
The floor clause does not appear by that name in the loan contract (it is recalled that it was applied to variable mortgages) for the purchase of a home or property. In the section on "interest" or "interest rates", or in the breakdown of the financial conditions, it is included under other headings: "Limits to the application of variable interest", "Limit to variability", "Variable interest rate", "Minimum interest rate", "Limitation to the interest rate", "tunnel", "minimum charge" or similar.
Another way to find out is by calculating the interest rate applied by the bank. If it exceeds the value of the Euribor plus the differential, which must be stated in the contract, it means that a floor clause has been applied to the mortgage.
How to claim floor clauses?
There are two ways to claim floor clauses: out of court and in court. Starting with the first, a formal complaint must be made to the bank that applied the floor clause. The bank has a period of up to three months to accept the claim and proceed to refund the money, although it can also offer an alternative such as reducing the outstanding capital of the mortgage or investing the money returned in savings products.
If the bank does not accept or does not reach an agreement, you have to go to court. The bank should be reported to the specialised court in the province of residence or to an ordinary court if the mortgage was applied for as a legal entity. A lawsuit can be filed by hiring a lawyer.
How long have floor clauses existed?
We have to go back to the 'brick boom'. During its outbreak, around 2007, the crisis officially began in Spain. To safeguard themselves, banks introduced floor clauses in mortgages to limit the fall in interest rates in variable-rate mortgage contracts. In this way, no matter how much the Euribor fell, they could ensure that they would continue to charge a profitable interest rate.
According to the Supreme Court, before 2004, 30% of mortgages already had a mortgage floor. However, it was in 2009, in the midst of the crisis, when they were applied to the maximum. Despite the sharp drop in the Euribor, thousands of people did not see any reduction in their monthly mortgage repayments as they should have, so a judicial process of judgments and claims began and continues today.
