Carmen Robles fears that her repayment will almost double. :: c. m.
No property buyers believed that the ‘Hipoteca tranquilidad’ (tranquility mortgage) would cause them such problems in the future as the full details of the plan are now realised. Many were tempted by this deal offered by Banesto bank (now part of Santander) because it assured customers that they would have a ten-year fixed interest rate free from the fluctuations under Euribor.
However, not only have those who took out a mortgage through the scheme had the resign themselves to paying an interest rate between 5 and 5.75 per cent, but they have also witnessed monthly rises of between 2 and 2.5 per pent. This is due to a clause in the contract that, according to those who took out the mortgage, no one informed them of before signing the agreement.
A number of people have recently raised their concerns on Internet forums after finding out about the amount they owe. Many are experiencing an interest rise that may continue for the full length of the loan due to an “indecipherable” clause in the agreement.
The Consumers Union (Unión de Consumidores, UCE) has responded to the numerous complaints that it has received. A document collection campaign has began by the UCE in order to prepare a collective lawsuit against the bank so that the conditions are nullified.
“This is one the largest bank scams; the mortgage agreement is full of exorbitant clauses and the bank will always come out on top,” said lawyer, Alfonso Rodríguez Arnet, who is coordinating the nationwide UCEcampaign. He has already received documentation from 500 people across Spain, with Malaga, Cádiz and Seville being the three worst affected provinces.
During the first years of the agreement clients only pay interest, meaning that it is impossible to change the stipulations of the loan. This resulted in many asking for the same amount that they initially requested years later.
Malaga-resident Carmen Robles only paid off 7,000 euros in seven years. She currently makes a repayment of 930 euros per month that is divided up as follows: 100 euros for the actual loan and 830 euros of interest.
Robles started by paying 780 euros a month and now pays 930 because of the 2.5 per cent annual increase. She fears that the continual rise will make the loan unpayable. “I will take the bank to court because the branch manager assured me that the repayments will keep going up after the first ten years and will eventually reach 1,600 or 1,700 a month, an amount we can’t afford,” said the 34-year-old secretary. “The bank knew that the Euribor rate was going to go down when they offered me the 5% fixed interest loan; I am no economist, but I let myself be deceived”.