IRPH: A ruling that could put the banks in check
At Euriux Abogados we are awaiting the pronouncement of the General Court of the European Union. General Court of the European Union which in this first quarter of 2020 must pronounce on the Mortgage Loan Reference Index (IRPH). The High Court must decide, as it did in December, whether these mortgages have abusive clauses and could open the door to thousands of claims. According to data from Goldman Sanchez, in Spain, compensation could rise to 44,000 million euros.
The most exposed entities could be Caixabank and Santander with 24% of the total of these loans. They would be followed by Kutxabank, with 18%, Bankia and BBVA, with 10% each; the now defunct Catalunya Caixa (integrated into BBVA) and Grupo Caja Rural, with 4% in both cases, and Sabadell, with 3%. In financial terms, Caixabank tops the list with 6.7 billion, followed by Santander with 4.3 billion, BBVA with 3.1 billion, Bankia with 1.6 billion, Kutxabank with 1.235 billion and Sabadell with 830 million.
What is the IRPH?
The IRPH is an official index prepared by the Bank of Spain, and the second most used, after the Euribor, in variable mortgages. It is calculated by averaging the interest charged by banks, including mortgage costs on mortgage loans over three years. Generally, the IRPH has always been higher than the Euribor. This interest rate is more beneficial for the banks and in most cases negative for the customer. According to iAhorro, the customer can pay 2,000 euros more per year with this interest rate.
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