Abusive Insurance costs

Attached abusive insurance costs (Life insurance, Mortgage repayment Insurance)

Banks for years have been selling expensive insurance policies to those seeking a mortgage to purchase a property in Spain.

Most bank staff have pressured borrowers by insisting that the policy was a requisite to obtain the mortgage, with most unaware that they could shop around and find cheaper quotes from insurance companies.

The only insurance that a bank can insist on linking to a mortgage is buildings insurance!

Borrowers were incorrectly told that Life insurance was mandatory; the Banks then imposed a particular insurer (usually a part of the same company or financial group) on the borrower, and then in most cases managed to tie the borrower into paying the premiums for the full term of the policy simultaneously with the mortgage agreement.

For example: A 20 year mortgage agreement with life insurance at an annual premium of €1,000.

The bank lends the agreed capital mortgage with an extra €20,000 added to the total (usually at the interest rate of a personal loan).

This is known as the “one-off financed premium” which means that the borrowers pay the premiums for the whole term of the mortgage up front with a loan.

Most borrowers have not been properly advised of what they were agreeing to, or the financial consequences, in fact in many cases the borrower was not made aware of the financed insurance premium as it was practically hidden within the small print of the contract.

The first legal claims began passing through the local Spanish Courts mid-2015. The rulings passed were all in favour of the claimants – meaning that the Banks must cancel the policies and return the one-off premiums paid for the term of the mortgage yet to elapse (for example a 20 year insurance policy signed 5 years ago would have 15 years remaining, therefore the bank would have to return the premiums for the 15 years yet to come).

Some Banks appealed the first instance judgements, but the Courts of Appeal have thus far maintained the decisions of the lower Courts.


Our service then immediately springs into action, starting with us obtaining a reduction of your existing mortgage payments that within a month or two will exceed what you have paid.

If we can not do that then you have the guaranteed option to request a full refund of the administaration fee.