Forums » Discussions » How to know if my mortgage has IRPH and what to do about it
If you have or are looking for a variable rate mortgage , you will be familiar with the term benchmark . The most common of them in recent years has been the Euribor, but there was a time when others were the kings of the crown. This is the case of the IRPH. A benchmark that has been judicially challenged and considered abusive. Today we tell you how to know if my mortgage has IRPH and how to claim it.
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What is the IRPH?
Just as or more important than how to know if my mortgage has an IRPH is to know what the IRPH is . The acronym IRPH stands for Mortgage Loan Reference Index . An index, prepared by the Bank of Spain based on the average of the mortgage loans granted by financial institutions over three years.
On paper, the IRPH represented a less volatile benchmark than the Euribor . An insurance against the instability of an index that in 2008 was above 5%. But in reality, it has been an index that has served to keep interest rates high compared to a mortgage loan referenced to Euribor.
What does justice say?
IRPH's main problems are its complicated calculation method and its lack of transparency . Some criticize that it is a manipulable index and that is why when other indices plummeted, this was not reflected in the IRPH. For all these reasons, organizations of those affected have agreed to bring the IRPH to justice . But, what does justice say about this? Is the IRPH an abusive clause or not?
After several sentences in favor of the victims of the IRPH before the ordinary justice, the supreme court ruled that the IRPH was not abusive. However, a CJEU ruling contradicted the Supreme Court and added that the IRPH went against European regulations . This has given wings to those affected who will be able to claim the irph again and has returned the ball to the roof of the Spanish justice system.
How to know if my mortgage has IRPH: Types of IRPH
How to know if my mortgage has IRPH is easy. Looking at your contract you should know whether or not your variable mortgage is indexed to the IRPH. But you should know that there are several types of IRPH:
- The IRPH Boxes
- IRPH Banks
- IRPH Entities
Despite being similar, the calculation method varies between them. Of these three, only the IRPH entities is still in force . The first two were already canceled due to lack of transparency and should not be used today. However, the Entities IRPH has been the most common substitute for the other IRPHs. Therefore, if your mortgage was referenced to one of these two indexes, it is very likely that you can continue claiming.
How to know if my mortgage has IRPH
Clause three of your mortgage contract should specify whether or not your mortgage has an IRPH . As is normal, the term IRPH does not appear as such. Instead, when the clause talks about the average rate of mortgage loans, we will know that our mortgage is referenced to this index.
How to claim IRPH
From the judgment of the Court of Justice of the European Union CJEU, a door of hope opens. All those affected by the IRPH may claim this clause and try to recover the lost money. But beware! In order to claim, you must follow these steps:
- Submit a letter to your entity: There you will have to request that the index be eliminated as abusive.
- Wait for the bank's negative response: The bank has up to 2 months to respond to your request. In the event that this is negative or does not exist, you can initiate the claim.
- Possible results: Once the lawsuit is initiated, the bank may accept the conditions or it may be set and in that case, a trial will have to be made.
This whole process can take a long time and not end the way you want it to. To avoid being in a situation like this, the best solution is not to make mistakes from the beginning. As you can see, signing a mortgage contract can have serious consequences and at Housfy we do not want this to happen to you. Therefore, our advisors will accompany you throughout the process so that you can keep the mortgage that best suits you .
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