The Euribor (Euro Interbank Offered Rate) is the rate at which European banks lend money to each other without collateral. In a Euribor-linked mortgage, your bank agrees an interest rate composed of the value of the Euribor plus a fixed spread (e.g. Euribor + 1%). If the Euribor rises, the interest rate on your mortgage increases and your monthly payment goes up, and if it falls, the opposite happens. The index is calculated for different terms (1, 3, 6 and 12 months) and is used every year (or semester) to revise the rate of your loan.
At BUFET GÓMEZ FERRÉ, as lawyers specialising in bank claims in Barcelona, we will detail below the key concepts regarding the Euribor and how to identify whether your contract contains abusive clauses in the mortgage loan and what claims you can make.
What is Euribor and how does it work?
The Euribor is the benchmark interest rate in the European unsecured interbank market. It is calculated daily as the average of the rates at which banks can lend money to each other at maturities of one week, 1, 3, 6 or 12 months.
For example, if the 12-month Euribor is 2% and your mortgage has a spread of 1%, your final interest rate would be 3%. Banks add this contractually agreed spread. The Bank of Spain stresses that these indices are used “as a basis for financial contracts, such as variable rate mortgage loans”.
In practice, the one-year Euribor is the most widely used in Spain for variable mortgages, the value of which determines whether its interest rate rises or falls each time its instalment is revised.
What factors influence the rise and fall of the Euribor?
The Euribor rises or falls mainly because of the European Central Bank’s decisions on interest rates. When the ECB raises rates, as happened between 2022 and 2023, the Euribor also rises, making mortgages more expensive. If rates fall, as has been the case since 2024, the Euribor tends to fall.
Summary of key factors influencing the Euribor:
However, many mortgage holders do not notice this reduction in their repayments because their contract includes clauses that prevent them from benefiting from these reductions, such as caps, floors, rounding or even the use of indices such as the IRPH.
These types of conditions may be actionable if they negatively affect the calculation of interest and it is therefore essential to review the contract in detail to check whether the Euribor is being applied correctly or whether there are clauses that could be considered abusive.
How does the Euribor affect your mortgage?
The influence of the Euribor depends on the type of mortgage you have: fixed or variable.
In a fixed rate mortgage, the interest rate agreed when you sign the loan does not change with the Euribor. Your monthly payment will always be the same during the fixed period and the fluctuations of the index do not affect you directly. On the other hand, in a variable rate mortgage your interest is revised periodically (normally once a year) by adding the current value of the Euribor to the differential.
In fact, the Bank of Spain explains that in a variable mortgage “if the reference rate increases, the cost of the loan will also increase and, if the reference rate decreases, the cost of the loan will decrease”. This means that every time the Euribor rises by one point, your interest (and therefore your instalment) becomes more expensive. If it goes down, you save on interest.
For example, with a loan of €150,000 and a spread of 1%, a Euribor of 3% would mean paying 4% interest. If the Euribor then drops to 2%, you would pay 3% interest, reducing your monthly payment.
On the other hand, in mixed or fixed-rate mortgages (if your loan allows them), these variations in the Euribor would no longer affect your instalment after the change. In general, nowadays most new loans tend to be fixed-rate, precisely to avoid the impact of rises in the index. However, if your contract is variable, you should understand how the Euribor affects my mortgage each time you revise the rate.
Is it possible to claim Euribor charges?
Although the Euribor as an index itself does not give rise to direct “expenses”, there are numerous bank claims related to abusive clauses and costs associated with mortgages, in these cases it is possible to claim unduly paid amounts from the bank. Among the main mortgage claim cases, the following stand out:
1. Claiming formalisation costs
Notary, registration, agency and valuation fees were often charged to the client.
Following several rulings by the Court of Justice of the EU and the Supreme Court, these clauses have been declared null and void. The Supreme Court has established that the period for claiming the return of these costs starts to run from the final judgment that declared them abusive. This means that any mortgage – even 10, 20 or 30 years old – can be claimed as long as the clause is not time-barred (normally 5 years from the final judgement).
2. Claiming floor clause and other clauses linked to Euribor
The famous floor clause prevented your interest rate from falling below a minimum, even if the Euribor was negative.
Since 2013-2016 these clauses have been declared abusive due to lack of transparency. If your mortgage had a floor, you could claim the difference overpaid. Similarly, any mechanism that limits or distorts the Euribor (such as excessive rounding, caps, etc.) can be challenged. It is also recommended to review the case of IRPH (another mortgage index); in many cases courts have allowed IRPH to be replaced by Euribor after declaring it abusive.
If you are interested in this topic or think it could apply to you, we recommend you read the following articles in our blog:
What is the floor clause and how do I know if I can claim it?
3. Claiming abusive fees and interest rates
Any arrangement fees or other unjustified charges can be claimed. Even if the interest rates for late payment are very high, they are considered abusive if they exceed what is legal. The Unfair Terms Directive (and Spanish law) determines that “contractual terms that have not been individually negotiated shall be considered unfair when… they cause a significant imbalance to the detriment of the consumer”.
In practice, the courts have annulled clauses such as excessive default fees, disproportionate surcharges or undue charges. In short, it is not the “Euribor charges” per se that are claimed, but those costs or interests linked to the mortgage that the bank could not justify or that turned out to be abusive.
At BUFET GÓMEZ FERRÉ we stand out for many of our frequent cases based on claiming abusive clauses, claiming ground clauses, claiming IRPH, among other mortgage expense claims. Our recommendation is that if your mortgage contained any doubtful clause (expenses, floor, Euribor rounding, etc.), it is worth studying it. In many of these cases it is possible to initiate a claim for abusive banking clauses to recover your money.
What to do in the face of the Euribor mortgage hike?
If you think your repayments have been triggered by the rise in the Euribor, consider taking the following steps:
- 1. Check the contract
Make sure that there are no abusive clauses (floor, commissions, rounding off) that prevent your interest rate from going down when the Euribor falls. If there are, you may be able to claim them.
- 2. Negotiate with the bank
Ask if you can switch to a fixed rate or renegotiate terms. Sometimes it is feasible to refinance or subrogate the mortgage to another bank with better rates.
- 3. Calculate alternatives
Use simulators to compare your current payment with lower Euribor or fixed rate scenarios to assess whether it makes sense to switch.
At BUFET GÓMEZ FERRÉ, we can help you to analyse your mortgage and decide whether it is appropriate to claim abuses or agree modifications. As experts indicate, “the distance between the index and the official rate barely exceeds one tenth of a percentage point”, so it is anticipated that the Euribor will continue to fall. Taking advantage of this trend can help you to reduce your payments in the future.
Frequently Asked Questions
There is no automatic procedure: the IRPH is the index agreed in your contract and is not changed “de facto”. However, recent case law allows that, if a judge declares the IRPH abusive in your mortgage, it can be replaced by a supplementary index. In practice, the courts have decided that when the IRPH is annulled, “the national judge could replace this clause with a supplementary provision of national law”.
Usually applying the Euribor plus the same differential. In other words, if the IRPH is annulled in court, the bank will not be able to demand repayment of the loan and Euribor will most likely be applied as the new reference rate.
In any case, each case is different: it is advisable to consult our mortgage lawyers to assess the strategy (nullity lawsuit, negotiation of subrogation or change of conditions).
Yes, it is possible. The Supreme Court has clarified that the deadline for claiming mortgage expenses (notary, registry, etc.) does not begin at the time of signing, but from the time when there was a final judgement declaring the abusive expenses clause null and void.
Since the declaration of nullity occurred recently (especially from 2019-2021), the action remains in force. Consequently, even older mortgages fall within the 5-year period after the court decision. The claim simply has to be initiated before this period expires. Therefore, even mortgagors from decades ago can claim today for these unduly charged costs.
The duration of an export default claim depends on several factors:
- The debtor’s country, if there is cooperation from the debtor’s side.
- The type of procedure used (extrajudicial, order for payment or ordinary judicial).
- The complexity of the case.
In general, a European order for payment procedure can be resolved within a few months, whereas an international dispute may take longer if it requires translations, recognition of judgments or attachments. Our lawyers will be able to advise you on the estimated timeframe for your specific situation.
Free lawyer consultation – Lawyers specialised in mortgages Barcelona
At BUFET GÓMEZ FERRÉ we offer the first consultation free of charge and without obligation. Our law firm in Barcelona has extensive experience in banking law and mortgage claims. We will help you understand your options: from renegotiating or changing your loan, to claiming abusive clauses or undue expenses.
Rely on our experience in banking law and our result-based billing model, where the payment of our services will be based on the success of the claim, fully adapting to your economic proposals and policies of minimum cost and maximum efficiency. Recover what is yours with the backing of our expert lawyers in mortgage and banking law.
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