Press room

Interest rates, fees and banking practices

• How are interest rates set for mortgages?

  In Spain, the large majority of mortgages are taken out at variable interest rates based on an official benchmark rate. Usually this is the one-year EURIBOR rate (calculated by the European Banking Federation using data from the main banking institutions of the euro area, and which consists of the average spot rate for euro deposit transactions with a one-year term).

  Mortgage-backed loans taken out at variable interest rates are reviewed according to the terms of the loan agreement, usually on a yearly or half-yearly basis.

  In order to increase market transparency, official benchmark exchange rates have been established for the mortgage market (Order EHA/2899/2011 on bank services' transparency and customer protectionand Banco de España Circular 5/2012, on transparency in banking services and responsibility in lending), which are published each month in the Official State Gazette and are valid from the date of publication. The one-year EURIBOR is the most widely used benchmark, with other published data including the internal rates of return on government debt on the secondary market, with maturities of between two and six years; the five-year interest rate swap (IRS); the average rate for mortgages at over three years, granted by all Spanish financial institutions, and the average rate for mortgages of between one and five years, granted by all credit institutions in the euro area.

  Although no longer valid as official benchmark rates for the securing of new loans, the one-year MIBOR (which is now only officially recognised for mortgages taken out before 1 January 2000, and which is practically identically to the EURIBOR), the savings banks' reference lending rate (CECA indicator) and the average rates of mortgage loans at over three years applied by banks and savings banks (which remain an official benchmark for loans taken out before 29 April 2012) are also published. EURIBOR, MIBOR, IRS and internal rates of return on government bonds with two-to-six year maturities traded on the secondary market, are published in the Official State Gazette during the first week of each month. Other rates are published on around the 20th.

  The Banco de España publishes the value of the official rates and their effective date on a monthly basis. They may be viewed in the Interest and exchange rates section, in Tables 19.1  and 19.2  of the Statistical Bulletin, appearing under the heading "Legal interest rates and other mortgage-market interest rates" in the Related Information column.

• Can the benchmark interest rate be rounded up or down in reviews of variable-interest-rate mortgages?

  According to the Law on Measures to Reform the Financial System of 2002, the variable interest rate associated with mortgage loans taken out after its effective date may be rounded up or down to the nearest eighth of a percentage point, as a maximum, by the periodic review of the mortgage loan interest rate.

• How can I verify whether a credit institution has correctly applied the stipulated interest rate?

  In order to confirm that the interest rate review carried out by an institution has been done correctly, the clause on interest rate review stipulated in the contract should be used as guidance.

  This clause will set out the time at which this review must be made and the date of publication of the applicable reference rate that the institution must use.

  Benchmark rates are only applicable following the publication of the corresponding resolutions in the Official State Gazette (BOE), which usually occurs a few days after they have been disclosed by the Banco de España.

  EURIBOR, MIBOR, IRS and internal rates of return on government bonds with two-to-six year maturities traded on the secondary market, are published in the Official State Gazette during the first week of each month. Other rates are published on around the 20th. The official mortgage-market reference rates can be consulted in Table 19.1  in the Statistical Bulletin.

• Where can I find the EURIBOR rate?

  The value of the one-year EURIBOR "interbank reference", the main official benchmark index for the mortgage market, can be consulted on this website, in Table 19.1  of the Statistical Bulletin, as well as the time series for this rate  (152 KB) .

  It is also possible to find information on the EURIBOR with overnight and 1, 3, 6 and 12 month rates, in the following tables: Summary indicators - euro area  and Interest rates (daily data); EONIA, EURIBOR and others... 

  Monthly averages for one-month, three-month and one-year data are included under Table 9.1  of Banco de España Economic Indicators. In addition, monthly averages for overnight (EONIA), three-month and one-year maturities are published in the Statistical Bulletin in Table 1.15 .

  Average data may also be found on the website of the European Central Bankand on the website of the European Banking Federation, which is ultimately responsible for producing the EURIBOR.

• Is the MIBOR rate still published? What about the IRPH (Mortgage Loan Reference Index) of banks and savings banks, and the CECA indicator? Where can I consult them?

  The one-year MIBOR rate (the official benchmark rate for mortgages taken out before 1 January 2000), the average rates for mortgages at over three years taken out with banks and savings banks (IRPH) and the savings banks' reference lending rate or CECA indicator (all of which remain official benchmarks for loans taken out before 29 April 2012), continue to be published in the Official State Gazette. You can check their value in Table 19.1 of the Statistical Bulletin  , as well as the time series for these interest rates  (152 KB) .

  The Banco de España will continue to publish the average rates for mortgages taken out with banks and savings banks at over three years, and the CECA indicator, on a monthly basis for at least one year (until 29 April 2013) and provided that the legislator establishes a transitional regime for the affected loans during this period.

  As well as the data used as a reference for mortgage loans, the Banco de España discloses daily average data for the last two months of the MIBOR rate, for all maturities in the following table: Interbank market interest rates . In addition, the Public Debt Market Bulletin publishes minimum and maximum interest rates that may be used as an unofficial reference for mortgages and other transactions.

  The Banco de España calculates average monthly data for the MIBOR with various maturities (overnight, 1 month, 3 months, 6 months and one year), which are published under Indicator 9.1.  .

  The following explanatory notes provide an explanation on how these calculations are performed.

• What is the legal interest rate? How is it set and where can I consult it?

  The Spanish Civil Code (Código Civil) defines the legal interest rate for money borrowing as the rate applicable when a debtor is in default of payment and no specific rate has been agreed. The rate is set each year in the Law on the State Budget, following the trend of the financial markets. Its value can be found in Table 19.1 of the Statistical Bulletin  , along with a time series  (68 KB) .

  For more information, please see the Interest rates / Other public reference and legal interest rates section in the Bank Customer's Portal.

• Does Banco de España approve the fees that credit institutions charge their customers?

  The charging of banking fees by credit institutions is subject to the following rules:

  Banks are free to set their fees and prices. The Banco de España cannot refuse to let them charge banking fees, or place limits on the amounts charged. Banks can set the fees that they see fit, save for a few banking transactions in which the amounts are limited by law, as is the case with the early redemption or repayment of a mortgage loan covered by Law 2/1994 –variable rate mortgages- or a consumer credit facility referred to in Law 16/2011 .

  Bank fees and costs must respond to the services effectively provided or expenses incurred. They cannot charge you for services you have not requested or accepted. In any case, the institution must personally inform you of the cost of the service in advance.

  When the terms and conditions affecting contracts are subject to amendment, changes must be notified to the affected clients at least two months prior to their application in the case of payment services, and one month in the case of other services, if the term of the contract continues after such a period.

  If there are amendments to limits or the capacity to dispose of new amounts, in circumstances where the client has previously failed to comply with its obligations, the notification must be made at least 10 days in advance.

  Should the amendments entail a clear benefit to the customer, they may be applied immediately.

  For more information, please see the Fees section in the Bank Customer's Portal.

• Does the Banco de España have any specific regulations on the interest rates that institutions may apply for account overdrafts?

  Law 16/2011 on Consumer Credit Contracts and Circular 8/1990 of the Banco de España on Transparency of Operations and Protection of the Client, establish credit institutions' reporting obligations with regard to overdraft advances and the maximum rates that can be applied.

  Under no circumstances may overdrafts on consumer current accounts be charged an interest rate resulting in an annual percentage rate that is greater than 2.5 times the legal interest rate.

  For more information, please see the Fees section in the Bank Customer's Portal.

• Is there any regulation applicable to the fees charged by institutions for transfers to other euro-area countries, or for cash machine transactions in these countries?

  Based on the provisions of Regulation (EC) No 924/2009 of the European Parliament and of the Council, of 16 September 2009, on cross-border payments in the Community , the bank fees charged by a financial institution for making a cross-border transfer in euros (and also in Swedish kronor and Romanian lei) between countries in the European Economic Area (those of the European Union plus Liechtenstein, Norway and Iceland), for amounts up to €50,000, shall be equal to those charged by the same institution for corresponding payments within the Member State.

  The standardisation of bank fees requires that bank transfers can be processed automatically, for which purpose the recipient's IBAN (International Bank Account Number) and the bank's BIC (Bank Identifier Code) are required. Both can be found on the statements issued by financial institutions.

  The requirement of equality of charges is also applicable to bank fees for cross-border electronic payments (including card transactions) of up to €50,000.

• What obligations do credit institutions have to identify their customers?

  According to Law 10/2010 of 28 April, on the prevention of money laundering and terrorist financing, credit institutions are obliged to identify any physical or natural persons that try to establish business relations or act as a party in any transaction. However, until the regulation implementing Law 10/2010 is published, the exception established under previous regulations remains in force, according to which the institutions are under no obligation to identify non-habitual clients making transactions with a balance not exceeding €3,000, save where this relates to transactions in installments or where there are signs of money laundering. In transfers, identification is compulsory regardless of the amount.

  The documents considered as valid proof of identity for private individuals are a Spanish national identity document, a residency permit issued by the Ministry of the Interior, a passport or a valid identity document issued in the customer's country of origin. Credit institutions must retain a copy of the presented identification documents. The foregoing is in addition to the fact that clients must provide their tax identity number in accordance with current regulations.

  Credit institutions must also identify the real owners, meaning the private individuals on behalf of whom their customers, if any, are acting, and those who own a shareholding of more than 25 per cent in the capital of the institution's clients, where these are legal entities.