The IRPH or Mortgage Loan Reference Index
is one of the indicators used by different financial institutions to update the variable interest rate of mortgages. This type of interest is characterised as being non-transparent and manipulated by the banks. In other words, the IRPH becomes an unfair term imposed to the clients by the bank, without being aware of it, nor being informed of the future loss incurred, exactly like the mortgage floor clause (both are part of the unfair terms used by banks).
However, we should not confuse the floor clause with the IRPH, in fact a lot of the times they complemented each other. While the floor clause is a limitation on the interest rate you will pay on your mortgage, the IRPH is a reference indicator to update that interest rate, which over the years has not fluctuated as much as the Euribor, particularly downward. In both cases, the bank uses them to profit and guarantee a fixed benefit.
What happens if my mortgage suffers from the IRPH?
The bank applies on your monthly receipt an interest rate that links the amount of your mortgage each month, taking as reference an index manipulated by their own entity.
While the most common index is the Euribor, there are many people affected by the IRPH who continue to pay higher interest rates, even though the Euribor currently sees the lowest levels. Many banks choose to apply the IRPH index, despite causing the client a greater loss, obtaining thereby a clear benefit on their mortgage.
Our law firm can help you claim your money back from the IRPH on your mortgage.
Does my mortgage have IRPH?
In order to find out, you must hold a copy of your mortgage deed, since the IRPH clause, like the floor clause, will be mentioned, although often hidden and difficult to understand. If you do not have a copy, please request one from your bank or the notary where it was signed. Additionally, due to the possibility that your deed has rebates and / or is also affected by the floor clause, it is important that you request an amortization table stating the monthly payments which have been debited to date, from that start of the mortgage.
However, an indication that you may be affected by the floor clause and / or IRPH is if your monthly mortgage receipt has not seen a decrease in the recent years, because if it were Euribor, you would have seen how the rates gradually decreased, benefitting you a reduction in the monthly charges.
How many types of IRPH exist?
There are 3 types of IRPH which you can find in your deeds:
- IRPH Entities
- IRPH Banks
- IRPH Savings banks
From the 1 November 2013, the IRPH banks and savings banks disappeared due to their misuse, meaning that currently only the IRPH entities remains in force. The three are equally detrimental, and often where the reference IRPH banks or savings banks was in place, they were directly replaced by entities, without prior information to the customer.
Can I make a claim and get my money back?
You can claim and you have the right to do so. Our law firm specializes in banking law and claims of unfair terms, and can file a claim and assist you in negotiations with your bank.
First of all we need to carry out an analysis of your mortgage to make sure you have this clause, or others that are equally unfair. Once checked, we value the possibility of making an estimate by expert economists to know what amount has been overpaid. Once the calculation has been done, we can request with accuracy in first instance from your bank, and before court, the annulment of the IRPH clause and claim the corresponding amount of the overpaid interest, which will also result in a reduction of pending capital and therefore a reduction in outstanding payments (in the case that the mortgage is still valid).
It is possible and lawful to carry out this claim, because this clause is only beneficial to the bank and harmful to the customer. If your mortgage has expired, you can still make claim.
We specialise in Banking Law
What will I get if I make a claim?
First of all, the monthly payment for your mortgage is reduced due to the cancellation of the IRPH, so the interest rate associated with your mortgage will be lower, as from then onwards, you will be associated with the Euribor, which is well below the Mortgage Loan Reference Index.
And on the other hand, you will get a refund on the money which you have been overpaying all this time (from the date the mortgage deed was signed until the day of the interest rate change).
Favourable ruling over IRPH
There are more and more rulings favourable to the client, against the unfair term of the IRPH, imposing the annulment of the clause and the subsequent refund of interests charged too much, during the entire time the clause was in force.
Call us without obligation, our expert advisers will review your deed and advise you on the viability of your claim, helping you to claim your money back.