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How to know if your mortgage has a base clause

The base clause scandal that the banks included in the mortgages given to Spaniards and were declared illegal and abusive by the Supreme Court was revealed some time ago. It was specifically about a minimum interest rate that the borrower had to pay regardless of whether the interest rate fell below the base rate.

Although it seems incredible, almost two years have passed and there are still many people who do not know if they have such a ground or base clause on their mortgage, which is why they do not know if they are willing or not to make a claim. This is why we want to explain to you where it is in your mortgage contract and whether it should be included within it.

Where is the base clause?

The ground or base clause should show in the mortgage credit agreement, which should never be confused with the title deed of the house in question. In fact, it should appear in any of the following points:

Madrid - Clausula suelo

- In the Stipulations and Deeds section.
- In the Transfer section. The normal thing is that it appears in this section if it is a subrogated mortgage.
- In the Financial Clauses section. As the number of mortgage loans granted in Spain was extraordinarily high for a long time, some lending companies began to use 'type' contracts. For this reason, the most common is to find the base clause within the "third financial clause", which is usually intended to establish the variable interest rate.

Other places in your mortgage contract where you can find the base clause

Even with slight variations, every mortgage contract is written in the same way. In fact, this also happens regarding the deed of the house. You have the possibility to review the document and go directly to the 'Interest rates' section. If you have a base clause, you will find a sentence similar to this: "The nominal annual interest rate of each variation may be less than X%".

This clause also makes an appearance in the payment of the mortgage invoice that arrives to your house every month. In fact, you can easily check if you have it included if the sum of Euribor + Differential is not the one that corresponds to the current times.

For example, if at the time of signing the mortgage contract, you agreed an interest rate of 0.50 + Euribor with the bank, which is currently at -0.19%. Therefore, if your payment appears in the 'Type' section, for example, 2.50%, you have been charged a base clause. This is the sum of 0.50 minus 0.19 equal to 0.31%, as you would have calculated on your own.

In case of detecting this irregularity, do not hesitate to contact your bank to negotiate the removal of the base clause. You should also ask for your money to be refunded to you. If you are not satisfied with the service from your bank, make sure you contact a specialised lawyer.

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