Floor clause


The floor or mortgage floor clauses are one of the requirements established in the mortgage contracts, in which minimum limits are established for the interest that will be obtained, since these cannot be quoted under this figure. This measure, in addition to the so-called ceiling clause, was adopted in the banks of the European Union, because the interest rates on benefits are based on the reference figures published by Euribor every day and these, since 2009, have presented astronomical declines, resulting in little benefit to lenders. In Spain, a court in Madrid advocated banning this practice, calling it “not very transparent” and “abusive.”

The Court of Justice of the European Union, in 2016, decided, without appeal, that all the money collected by the banks under the floor clause, should be returned to the clients, as it is an unfair practice. However, it is not completely prohibited, since banking entities can still include them in their contracts, with prior negotiation and clear knowledge, by the debtor, about the limitations and requirements that the clause brings with it. Fraudulent, it used to be mentioned under the name of: limits to the application of variable interest, variability limit, variable interest rate. In this way, it was determined that the percentage could not drop to a number previously established by the lender.

In view of the losses that are evident in the Euribor, the banking entities have opted for other options that bring them certain benefits, such as incorporating zero clauses, where, in view of the negative values, it is stipulated that the client waives his right to payment of the mortgage by the lender. In this way, customers avoid paying the interest on the mortgage loan.