IRPH Mortgages (updated to July 2023)
In this article, we will attempt to bring up-to-date the legal landscape related to mortgage loans indexed to the IRPH of entities from 2023 (information updated to July 13, 2023). Mortgage holders who had their mortgage referenced to an index that disappeared, such as the CECA, the IRPH of savings banks or that of banks, will also find here information that will be helpful to them.
If you are affected by an IRPH mortgage and want specialized lawyers to analyze your case, request information by email from the professionals at Futur Legal:
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The information about the IRPH and its legal evolution in Spain and in European justice is presented here from the most recent to the oldest.
To clear doubts for free you can ask lawyers and economists in our forum of affected people and experts.
Indice
Latest news on the IRPH 2023
The latest regarding the controversial benchmark will be communicated and updated in this section.
CJEU Judgment of July 13, 2023
You can consult the CJEU judgment on case c-265/22, which deals with a request for a preliminary ruling lodged under Article 267 TFEU by the Court of First Instance No. 17 of Palma de Mallorca (Illes Balears), by order of April 19, 2022, received at the Court of Justice on April 20, 2022, in relation to a mortgage loan indexed to the IRPH of a consumer with Banco Santander in this PDF.
The CJEU declares:
Articles 3(1), 4 and 5 of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts should be interpreted as meaning that, in order to assess the transparency and the potentially abusive nature of a clause in a variable-rate mortgage loan contract that designates, as the reference index for the periodic review of the interest rate applicable to that loan, an index established by a circular that was officially published and to which an increase is applied, the content of the information included in another circular from which it follows that it is necessary to apply to that index, given its method of calculation, a negative differential in order to equalize that interest rate with the market interest rate is relevant. It is also relevant to determine whether this information is sufficiently accessible to an average consumer.
CJEU Order of February 28, 2023
Which you can consult in PDF. In this order, the CJEU responds to the preliminary question raised by the JPI No. 17 of Palma de Mallorca in April 2022.
We invite you to watch the following video from the YouTube channel of El Hipotecante, Pau A. Monserrat, CEO of Futur Finances and economist with a long track record in the financial sector:
Provision of December 2022
Our colleagues from RES Lawyers have sent us the provision signed by Magistrate Ms. Eva Cerón Ripoll of the JPI No. 8 of Donostia, notified on January 10, 2023, which you can consult here.
The judge expresses serious doubts about the TS’s stance, among other things “as to whether to shift the responsibility of the professional in order that with his intervention and the information provided to the consumer he may understand the functioning of the calculation method of the IRPH rate so as to assess according to precise and understandable criteria the potentially significant economic consequences resulting from its application, to the consumer himself so that he is the one who, after locating in the BOE the definition of the IRPH index, and after finding out that it is elaborated from a simple average of TAE rates, deduces by himself, with his scant or no financial knowledge, that the said index is calculated according to the average rate of mortgage loans for more than three years for the acquisition of housing, thus including the differentials, commissions, and expenses applied by such entities.”
The provision lists up to 11 doubts about the mortgage benchmark and sends them to the parties and the Public Prosecutor’s Office, a preliminary step to raising the possible preliminary questions before the CJEU.
IRPH vs Euribor 2021-2023
IRPH for May 2023: 3.967%
In the following table you can find the monthly value of the IRPH of entities and the 12-month Euribor, as well as the difference:
| Mes | Orden | IRPH entidades | Euribor 12m | Diferencia |
|---|---|---|---|---|
| Enero 2022 | 13 | 1,485% | -0,477% | 1,962% |
| Diciembre 2021 | 12 | 1,448% | -0,502% | 1,950% |
| Noviembre 2021 | 11 | 1,470% | -0,487% | 1,957% |
| Octubre 2021 | 10 | 1,467% | -0,477% | 1,944% |
| Septiembre 2021 | 9 | 1,489% | -0,492% | 1,981% |
| Agosto 2021 | 8 | 1,529% | -0,498% | 2,027% |
| Julio 2021 | 7 | 1,485% | -0,491% | 1,976% |
| Junio 2021 | 6 | 1,527% | -0,484% | 2,011% |
| Mayo 2021 | 5 | 1,507% | -0,481% | 1,988% |
| Abril 2021 | 4 | 1,480% | -0,484% | 1,964% |
| Marzo 2021 | 3 | 1,571% | -0,487% | 2,058% |
| Febrero 2021 | 2 | 1,565% | -0,501% | 2,066% |
| Enero 2021 | 1 | 1,558% | -0,505% | 2,063% |
| Febrero 2022 | 14 | 1,481% | -0,335% | 1,816% |
| Marzo 2022 | 15 | 1,513% | -0,237% | 1,750% |
| Abril 2022 | 16 | 1,540% | 0,013% | 1,527% |
| Mayo 2022 | 17 | 1,624% | 0,287% | 1,337% |
| Junio 2022 | 18 | 1,799% | 0,852% | 0,947% |
| Julio 2022 | 19 | 1,986% | 0,992% | 0,994% |
| Agosto 2022 | 20 | 2,198% | 1,249% | 0,949% |
| Septiembre 2022 | 21 | 2,410% | 2,233% | 0,177% |
| Octubre 2022 | 22 | 2,666% | 2,629% | 0,037% |
| Noviembre 2022 | 23 | 2,877% | 2,828% | 0,049% |
| Diciembre 2022 | 24 | 3,116% | 3,018% | 0,098% |
| Enero 2023 | 25 | 3,345% | 3,337% | 0,008% |
| Febrero 2023 | 26 | 3,585% | 3,534% | 0,051% |
| Marzo 2023 | 27 | 3,664% | 3,647% | 0,017% |
| Abril 2023 | 28 | 3,683% | 3,757% | -0,074% |
| Mayo 2023 | 29 | 3,967% | 3,862% | 0,105% |
| Junio 2023 | 30 | 4,045% | 4,007% | 0,038% |
| Julio 2023 | 31 | 4,186% | 4,149% | 0,037% |
| Agosto 2023 | 32 | 4,237% | 4,073% | 0,164% |
| Septiembre 2023 | 33 | 4,305% | 4,149% | 0,156% |
| Octubre 2023 | 34 | 4,330% | 4,160% | 0,170% |
| Noviembre 2023 | 35 | 4,276% | 4,022% | 0,254% |
| Diciembre 2023 | 36 | 4,219% | 3,679% | 0,540% |
| Enero 2024 | 37 | 4,062% | 3,609% | 0,453% |
| Febrero 2024 | 38 | 3,985% | 3,671% | 0,314% |
| Marzo 2024 | 39 | 3,901% | 3,718% | 0,183% |
| Abril 2024 | 40 | 3,823% | 3,703% | 0,120% |
| Mayo 2024 | 41 | 3,861% | 3,680% | 0,181% |
| Junio 2024 | 42 | 3,710% | 3,650% | 0,060% |
| Julio 2024 | 43 | 3,728% | 3,526% | 0,202% |
| Agosto 2024 | 44 | 3,671% | 3,166% | 0,505% |
| Septiembre 2024 | 45 | 3,506% | 2,936% | 0,570% |
| Octubre 2024 | 46 | 3,423% | 2,691% | 0,732% |
| Noviembre 2024 | 47 | 3,206% | 2,506% | 0,700% |
For the first time in history, the overall IRPH in April was below the 12-month Euribor. In May, the IRPH is already more expensive again.
IRPH vs Euribor Graph (2000 to 2023)
In the following graph of the evolution of the IRPH of entities compared with the 12-month Euribor from January 2000 to 2023, we can observe how the IRPH has always been and will be above the Euribor, with a historical exception in April 2023:
What is the Mortgage Loan Reference Index?
The Circular 8/1990 from the Bank of Spain, now repealed, defined the IRPH (Mortgage Loan Reference Index) as "the simple average of the weighted average interest rates for the principal of mortgage loan operations with a term equal to or greater than three years for the acquisition of free housing that have been initiated or renewed in the month to which the index refers by the set of banks."
The Circular 5/1994, of July 22, to credit entities, modifying Circular 8/1990, on transparency of operations and consumer protection, provides information that makes clear the differential that should have been applied to the IRPH: a negative differential. Literally:
"The average rates of mortgage loans for free housing acquisition from banks and the set of entities are rigorously so, as they also incorporate the effect of commissions. Therefore, their simple direct use as contractual types would imply placing the annual equivalent rate of the mortgage operation above the market rate. To equalize the APR of the latter with the market, it would be necessary to apply a negative differential, the value of which would vary according to the commissions of the operation and the frequency of the quotas."
The current Circular 5/2012, of June 27, from the Bank of Spain in its annex 8 defines the IRPH of the set of entities as follows:
"It is defined as the simple average of the weighted average interest rates for the main operations of mortgage loans with a term equal to or greater than three years, for the acquisition of free housing, which have been initiated or renewed by banks and savings banks in the month to which the index refers."
The Order EHA/2899/2011, of October 28, on transparency and consumer protection in banking services, includes the six current official mortgage market interest rates, among which is the IRPH of entities or "Average rate of mortgage loans for more than three years, for the acquisition of free housing, granted by credit entities in Spain."
Law 7/1998, of April 13, on general contracting conditions (LCGC) establishes in its article 1 that "General contracting conditions are pre-established clauses whose incorporation into the contract is imposed by one of the parties, regardless of the material authorship of the same, their external appearance, their extension and any other circumstances, having been written with the intention of being incorporated into a plurality of contracts" and that "the fact that certain elements of a clause or that one or several isolated clauses have been individually negotiated does not exclude the application of this Law to the rest of the contract if the overall appreciation leads to the conclusion that it is a contract of adhesion." The IRPH of entities is a general condition of the contract.
Directive 2014/17/EU, partially transposed into Law 5/2019, says in its article 24 on the indices or reference rates of variable rate credits that Member States must ensure that "any index or reference rate used to calculate the debtor rate is clear, accessible, objective and verifiable by the parties to the credit contract and by the competent authorities". Conditions that we consider the IRPH does not comply with."
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