It is reported this week that a court is looking into the practices of Spanish banks including floor rates to which a rate cannot drop below in their mortgage deeds.
This practice has caught out many non-residents in the past who have been unaware of this restriction placed in their mortgage deed. The inclusion of these rate floors is particularly unfair in Spain as re-mortgaging is so costly and difficult to achieve that most clients have had to just live with what they have.
As Euribors are now rising this action for the short term my be a little too late for those mortgagees that have missed out on their Spanish mortgages dropping to an all time low but good news if the action is successful and prevents banks from including floor rates in the future.