BBVA eliminates the minimum limit clause from 426.000 mortgages.

Those affected by the minimum limit in their mortgages, that limits the reduction of the monthly payment if the interest rates falls below a certain level, have reasons to celebrate.

BBVA will stop applying, from the 9th May onwards, the minimum limit clauses to 426.000 mortgages, from a total portfolio of 800.000 loans for the acquisition of a home.

Cajamar will also eliminate this clause and NCG Banco is studying it, according to financial sources.

BBVA´s decision determines that the institution will stop earning around 35 million Euros per month in June, taking the current value of the Euribor at one year as a reference, as informed yesterday by the banks to the national share market commission. The losses “in future months will depend on the evolution of the euribor at one year”, which closed in May at 0,48%, the statement adds. Therefore, if the reference rate for mortgages stayed near the current levels until the end of the year, the institution would stop earning 245 million Euros.

The institution presided over by Francisco González has 530.000 mortgages with this clause, 80% of which are currently being penalized by that limit. If the Euribor continues showing very low levels, 104.000 clients more, the remaining 20% will be freed from this clause, considered abusive by different court rulings. (…)

Source: Expansión