Abusive mortgage 'set-up' costs

In December 2015, the Spanish Supreme Court ruled that mortgage clauses introduced by Banco Popular and BBVA that forced borrowers to pay all fees related to taking out the mortgage were abusive.

The Court ruled that the banks should pay for all or at least part of these mortgage opening expenses, because - for example - making a formal record of the mortgage deed is for the benefit of the bank.

Since then various First Instance and Provincial Appeal Courts have issued similar sentences in favour of mortgage borrowers.

The Supreme Court Sentence 705/2015 dated 23 December 2015 declared abusive the following clause in which BBVA imposed on the borrower the payment of all expenses, taxes and commissions associated with the mortgage loan:

“Borrower must pay all taxes, commissions and expenses incurred in the preparation, formalization, correction, writing, modification – including division, segregation or any change that implies alteration of the guarantee – and execution of this contract, and for the payments and reimbursements derived there from, as well as for the constitution, maintenance and cancellation of its guarantee, being also in its charge the premiums and other expenses corresponding to the insurance of damages, that the borrowing party is obliged to have in force”

Nullity declared by the Supreme Court is based on the lack of detail in the loan agreement, with regards to expenses, commissions and taxes, being imposed in a generic manner. If you paid all the fees related to taking out your Spanish Mortgage then you maybe entitled to a refund of some of those fees.

The expenses, taxes and commissions can be claimed are:

* Notary costs
* Mortgage Land Registry costs
* Registration costs (Gestoría) expenses (the company that ensures the property and the mortgage are correctly registered in the land registry – but only if the gestoría was imposed by the bank)
* Property Valuation costs
* Commissions on lack of payments

Any judicial or extrajudicial cost which has been charged automatically to the consumer, not following the perceptive rules of the Civil Procedure Act.

Mortgage set up fees normally represent between 2.5% and 3% of the mortgage value.

Note: Is it not likely to be possible to claim a refund of Stamp Duty.

Some Judges are ordering a refund of notary, mortgage land registry and gestoría fees, but not the Stamp Duty (AJD or Documented Legal Acts Tax), which in fact represents around 75% of the associated expenses when taking out a mortgage. Many claimants have though also claimed a refund of the Stamp Duty.

Sentences issued by the Supreme Court and the Provincial Appeal Court of Zaragoza say it is the Bank that must pay the cost of Stamp Duty.

However, the Provincial Appeal Courts of Oviedo & Pontevedra have issued Sentences stating that the Stamp Duty should be paid by the consumer.

There is no refund for Property conveyancing costs and Property Conveyance Tax which must always be paid by the home buyer.

Note: There are deadlines for claims

Deadline for claiming these costs and expenses is 5 years from the Supreme Court ruling of 23 December 2015.

Several Banks now changed their clauses relating to mortgage opening fees.

BBVA, Santander, Bankia, CaixaBank, Sabadell & Ibercaja have all changed their clauses relating to mortgage opening fees.

By doing so they hope to avoid future claims on new mortgages.

However, this does not prevent consumers claiming refunds for mortgages signed in the past with these banks.

It will take some time to see how big the retroactive claims for registration costs can be but it has the potential to be even bigger than the floor clause issue, because it is likely to involve every client who has taken out a mortgage.

This includes British owners too but most of those are not aware and they may well benefit from looking into this.


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.