Consumer groups have been critical towards Spanish banks for months now for the minimum-interest clauses within their mortgage agreements, resulting in homeowners failing to see the benefit of the low rate of the Euribor. Minimum interest rates have been stuck for many at 3.5 or 4%, whilst the Euribor has seen lows of 1.243 percent.
Many have viewed this as daylight robbery and recently, the government has been addressed by the banking consumer group, Ausbanc, to take action. Considering the struggles so many people are currently facing, not forgetting the constantly increasing number of repossession orders being issued, it seems ludicrous that banks have allowed thousands of mortgage payers to fail to see the benefit of these dropping interest rates, which would make repayments so much easier for many who are financially struggling in these crippling times.
In a recent press release Ausbanc said, "On September 23 the senate unanimously approved a motion presented by the Partido Popular stating that the minimum-interest clauses abusive and demanding that the dropping Euribor rate be effectively translated to the mortgage loans," it continued, "now it is time for the government to take measures necessary to apply this motion in the real world."
Mortgage payers were shocked to realise that despite the dramatic drop in the Euribor, the most common interest rate index used for Spanish mortgages, their own rates were not being reflected as this, seeing only a slight reduction at most.
Ausbanc have posted on its website, www.ausbanc.com, a template in a letter form for mortgage consumers to address individually to their personal banks, demanding what has been labeled as ‘abusive clauses’, to be dropped from their mortgage agreement.