Multicurrency mortgages? These are its characteristics

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Does the concept “multi-currency mortgages” sound familiar to you? Perhaps it has remained a bit in the memory... In today's blog we are going to remember what these mortgages are, what they offer, why they are no longer recommended , and, above all, how to claim if you have one. Do not miss it!

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What are multicurrency mortgages?
Multicurrency mortgages are a type of financial loan that is Vietnam Phone Number List characterized by having installments that can be paid with a currency other than the euro . They are variable interest mortgages , and, therefore, the Reference Index is associated with a foreign currency.

This implies that, when taking out a mortgage with a different currency, if it has a value lower than the euro, the interests were lower and you will pay less than if it were referenced to the Euribor; but, if, on the other hand, the value of the foreign currency is greater than the euro, you will pay higher interest.

These are your risks
Currently, it is no longer recommended to take out multi-currency mortgages , since it carries a high risk, and it has a fairly high level of variability , since the amount you end up paying will depend on whether the value of the currency you choose remains low throughout the period. mortgage loan or not.

Multicurrency mortgages became one of the most requested between 2004 and 2008 , especially referenced in Swiss francs and yen , since then the Euribor was at 4%, a very high percentage for the time, while the Swiss francs and the yen had a much lower value than the euro. It should be noted that the rise of these mortgages is also derived from the lack of transparency that financial institutions had with clients, since they did not properly inform them of the risks they assumed when contracting them and they thought that they were choosing the best mortgage of the moment.

What ended up happening? The value of these two currencies began to rise and remained well above the euro, which is why the debt of clients who requested a multi-currency mortgage multiplied .

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When are multi-currency mortgages abusive?
Despite this, it is currently not illegal to grant multi-currency mortgages , although the bank is obliged to properly inform you of all the risks before signing the contract. If this is not met, a multi-currency mortgage is considered abusive .

the Court of Justice of the European Union (CJEU) declared that any multi-currency mortgage that is contracted without the bank explaining the associated risks would be considered null and void because it is abusive and, with this, all those affected could claim to your banking institution.

This is how you can claim a multi-currency mortgage
To claim an abusive multicurrency mortgage you have two options:



Claim to the bank . The first thing you should try, before opting for legal action, is to negotiate the mortgage with your bank to find a solution. The problem is that in many cases they do not respond to the claim and you have to move on to the next step.
Report in court . This step is more tedious, it can take many months, but this way you will not depend on the bank. You can do this step through a lawyer or with a consumer association such as the OCU.
Once it has been established that the multi-currency mortgage is void because it is abusive, there are two options:

The multicurrency mortgage is once again referenced to the Euribor.
Your mortgage payments will be recalculated to deduct the money you have overpaid.
If this is your case, and you want to change your mortgage, but now you don't really know which one is best for you, you can use a mortgage simulator to find out.