What is IRPH and how does this clause work?

To begin with, we will explain what the term IRPH means. Basically, the acronym stands for Índice de Referencia de Préstamos Hipotecarios. This clause deals with how to acquire a house for a term of three years or more. These loans are currently supervised by the Bank of Spain.

This mortgage is calculated based on the estimated interest rates that financial players apply to current Spanish mortgages. That is why we recommend that you review the clauses of your mortgage contract to find out if the IRPH applies in your case. The majority of mortgages in the country that apply this clause exceed one million.

The reality is that the IRPH is known for having quite high rates, so it has a very negative charge that Spaniards affected by it have complained about. It has even involved the Court of Justice of the European Union (also known as the CJEU).

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The negative aspects and problems of this clause

In this section we will discuss the negative points and problems that the IRPH may present. To begin with, we will return to the aforementioned problem that this clause had with the CJEU and we will go a little deeper into it.

This Spanish mortgage problem came to light thanks to the Euribor rates. Broadly speaking, Euribor is a daily benchmark index that shows the lending interest that European banks have to pay to third parties and to each other. The currency used in this index is the Euro.

Therefore, it is in this index where the country’s problems with the IRPH could be seen. Since these loans are much more expensive than those in the Euribor, being between 1% and 3% higher. This caused a lot of controversy and several Spaniards complained about this situation and denounced it.

Complaints agreed that the banks were abusing this interest and that everyone was demanding the amounts they wanted. All this went all the way to the Supreme Court in 2017, where the ruling was in favor of the banks and it was declared that the rates they were demanding were not abusive.

How can I recognize if my IRPH is abusive or not?

If you are concerned about high interest rates on your mortgage, you should be aware that in order to be considered abusive, the rate must be higher than 1%. If this is the case in your case, then here are some indications that may be useful for you to make your claim:

You must first study in detail the deed of your mortgage loan.
Contact the customer service department of the bank with which you acquired the loan.
In case the bank does not give you an answer or you have problems of any kind, contact the Bank of Spain.
If the problem persists and you are not offered any solution, as a last resort we recommend filing a civil lawsuit.
The IRPH claim form can be found on several legal websites.

We hope this information has been helpful. If you have a problem with this mortgage clause or if you have a problem with your mortgage, we recommend that you contact us for any real estate problems you may have.