The Sims Freeplay- Floor Clause Walkthrough [Christmas 2021
The floor clause is the most common claim against lenders, since this clause would guarantee that the interest rate you would pay would never drop below a certain level, which, in most cases, has been around 3 – 5,5%. . Considering that interest rates since 2011 have plummeted and the EURIBOR is actually below zero, this means that you would be paying an extremely high interest rate compared to current market rates.
For example, one of our clients contracted a mortgage of 220.000 euros in 2007 with a floor clause of 3,5%, but with a margin over the EURIBOR of 1,25. He had been paying 3,5% when he should have been paying 1,25% for the last 6 years.
We calculated that the client had been overcharged 23.000 euros, but in the end she ended up recovering more than 27.000 euros, given the time it took for the lender to reach an out-of-court settlement and the 4% compensatory interest that the bank had to pay. plus surcharges.
Now that the lender has agreed to remove the 'undue sale' floor clause, this client's new mortgage payments are now calculated on the correct interest rate of 1,25% instead of 3,5%, meaning that you will continue to save thousands of euros a year for the rest of the term of the mortgage you signed.
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In most Spanish mortgages, the interest rate to be paid is calculated by reference to the EURIBOR or the IRPH. If this interest rate increases, then the interest on the mortgage also increases, similarly, if it decreases, then the interest payments will decrease. This is also known as a "variable rate mortgage", since the interest to be paid on the mortgage varies with the EURIBOR or the IRPH.
However, the insertion of the Floor Clause in the mortgage contract means that the mortgage holders do not fully benefit from the fall in the interest rate, since there will be a minimum rate, or floor, of interest to be paid on the mortgage. The level of the minimum clause will depend on the bank that grants the mortgage and the date on which it was contracted, but it is common for the minimum rates to be between 3,00 and 4,00%.
This means that if you have a variable rate mortgage with EURIBOR and a floor set at 4%, when the EURIBOR falls below 4%, you end up paying 4% interest on your mortgage. As the EURIBOR is currently negative, at -0,15%, you are overpaying interest on your mortgage for the difference between the minimum rate and the current EURIBOR. Over time, this could represent thousands of additional euros in interest payments.
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If you want to claim your “floor clause”, FreeClaim can help you. Our attorneys can help eliminate floral clauses included in mortgage or loan contracts. Said clauses will be considered void and the bank will have to return the undue amounts collected in application of said clause.
The so-called "floor clauses" prevent the interest rate from falling below a reference minimum, even if the Euribor (or another banking index) is below it. Currently, the Euribor is quite low, so if your mortgage has this type of abusive clauses, you may not benefit from the drop in the index.
To find out if your mortgage contract includes a floor clause, you must review the public deed of your mortgage. If it says that in any case the interest rate can be less than a fixed percentage, it is a floor clause.
In addition, you can initiate a claim on the floor clause if the interest rate that appears on your last bank statement is not equal to the Euribor (or the rate of your particular bank) plus the differential rate that you have agreed with the bank.
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At Carlos Haering Abogados we can check if your mortgage includes a floor clause. We will study your case, determine its viability and help you recover all the money that he overpaid.
The floor clauses of mortgages have become a problem for many consumers, who have discovered that they cannot benefit from the drop in the EURIBOR that has occurred in recent years, which has reached its historical low due to the economic crisis.
At the time of signing a mortgage, you must know and receive all the information about all the clauses and "small print". The floor clause establishes a minimum interest rate for all the installments of your mortgage loan, regardless of current market interest rates. Consequently, if the sum of the EURIBOR plus its current interest rate results in a lower rate than that established in the Floor Clause, you will not be able to pay the lower rate and will be charged, instead, the rate of the Floor Clause. .
Many clients have signed a mortgage without being informed of the existence of a Floor Clause and its consequences, and such a practice may be considered abusive or not very transparent by their bank. As such, it could be susceptible to legal claims, with a high probability of success.
