Developer's Mortgage Beware

 Just had a nasty shock regarding the Developer's mortgage that we were advised by our lawyers to take as it was giving us the best deal! We have just passed 6 months of our term and were looking forward to a substantially reduced mortgage, given the Euribor rate today. Throughout the process our offer was Euribor +1 , and we have just discovered there was a ceiling of 5% interest (as agreed with the developer and the bank but unknown to us or our lawyer apparently!)

Has anybody else had this problem? In the process of putting together a complaint to the Bank of Spain. Please pm me if you have had a similar situation etc 

Hi Judes,

This of course must be very disappointing for you and unfortunately many people are finding this as they come up for review.  Many lenders apply this and it will be there in the small print of your mortgage deed!  Although I have not heard of a min rate as high as 5%!   Were you at the notary for completion?  I am very surprised your lawyer did not point this out to you, especially when they were happy to recommend such a good deal!!!   Have you considered a switch to another lender? Perhaps one that does not have this condition(!) and pays the costs involved!

Hi Judes,

Was that with Banco de Andalucia or with La Caixa? Our mortgage is with Bco. Andalucia and we do not have that condition.

Regards,

Christian.

Just returned from Mojacar and when I was there I had a meeting with Banco Andalucia. Our rate is fixed at 4.9% for the first 12 months and then we thought that after 12 months it changed to euribor plus 1%. This is the case BUT there is a collar on the mortgage of 4% which means that it cannot go below 4% unless a modification is made to the mortgage which involves costs such as notary, bank fees etc.

I am currently seeking advice from my solicitor who I feel should have pointed this out to us when he completed on our behalf. 

It appears that these interest ceilings are inserted into non-resident mortgages by Spanish banks! Anybody  found a good deal recently either with a UK or Spanish bank as we are now considering switching?