We explain what this clause consists of and in which mortgages can be applied
Law 41/2007 of December 7, of Regulation of the Mortgage Market, contemplates the collection of a compensation by interest rate risk in the cases of subrogatory cancellation and not subrogation, total or partial, of the loans or mortgage loans, that take place inside of a period of interest rate revision whose agreed duration is greater than 12 months.
This compensation, which affects the mortgage loans and credits made after December 9, 2007, provided that the mortgage (collateral) falls on a home and the borrower (debtor) is a natural person or company of small size for the purposes of tax Societies, it tries to compensate the banking entity when the loan or credit is canceled in advance and the cancellation generates a loss of capital to the entity . In any case, the compensation may not exceed the amount of the loss generated.
In the loan or mortgages document, it is necessary to consider which of the modalities which are indicated below is the one applied to calculate the compensation for interest rate risk:
1. A fixed percentage to be applied to the outstanding capital at the time of cancellation.
2. The loss, total or partial, that the cancellation generates to the entity, calculated according to the difference between the capital pending at the time of the early cancellation and the market value of the loan or credit canceled.
In accordance with Law 41/2007 of December 7, for loans or mortgage loans referring to the fixed or variable rate of interest whose period of review is more than twelve months, there can be no commission for full or partial early repayment. However, it is possible to agree to a compensation for withdrawal and/or compensation for interest rate risk.
In relation to the compensation for withdrawal, which establishes compensation in respect of the loss suffered by a banking entity by the unilateral withdrawal of the contract , it can be agreed either loans or mortgage loans at a variable rate of interest whose period of review is equal to or less than 12 months, as well as for loans or mortgage loans at a fixed or variable type of interest whose period of review exceeds twelve months, provided they were formalized after 9 December 2007 and the conditions established in Law 41/2007 are given.
In addition to this compensation, Law 41/2007 of December 7 establishes compensation regarding the loss suffered by a banking entity by the unilateral withdrawal of the contract (compensation for withdrawal). In the same, the maximum amounts that the bank can perceive by this concept are indicated:
– The maximum compensation for amortization within the first 5 years of the life of the mortgage will be 0.50% of the capital amortized.
- The maximum compensation for amortization after the five years of the life of the mortgage will be 0.25% of the capital amortized.
Both the compensation for withdrawal and the type of interest rate risk must be determined in the contract and the mortgage offer provided by the banking entity, so it is advisable to know in detail all the conditions of the loan or consult the banking entity in case you have any questions.