FOR years, Spanish banks quietly siphoned money from unsuspecting homeowners using a single line buried deep in their mortgage contracts.
A clause so discreet, so poorly explained, that millions never realised they were paying far more than they should. It was called the ‘floor clause’ – and it became one of the biggest banking scandals in Spain’s modern history.
The Trap No One Saw Coming
Mortgages were sold as variable-rate bargains, promising payments that would fall as interest rates dropped. But when rates across Europe plunged after the financial crisis, Spanish borrowers were left behind. Their repayments stayed high. Painfully high.
Hidden in the small print was a ‘floor’ that stopped interest rates from ever going down – usually around 3%. No warnings. No clear explanations. Just higher bills, month after month.
British Buyers Caught in the Crossfire
Thousands of British citizens who bought property in Spain were hit especially hard. Many trusted local banks, signed contracts in a foreign language, and only discovered years later that they had been locked into a rigged deal.
One of them was John Lewis, from Manchester.
“I bought a holiday apartment in Calahonda, in Mijas, on the Costa del Sol, between 2001 and 2012, thinking I’d made a smart investment,” Lewis tells the Olive Press. “The mortgage was sold to me as variable-rate. I was told my payments would go down if interest rates fell.”
They never did.
Lewis took out his mortgage with Solbank, later absorbed by Banco Sabadell. When friends back in the UK were celebrating falling mortgage costs, his payments stayed exactly the same.
“I honestly thought something was wrong with my calculations,” he says. “It wasn’t until years later that I discovered a floor clause buried in the contract. No one ever explained it to me. Not once.”
By the time he realised, Lewis estimates he had overpaid tens of thousands of euros.
How to Claim Your Money Back: 3 Conditions
Not everyone affected can automatically claim a refund. According to legal experts, three conditions must be met to make a successful floor clause claim:
- Mortgage taken out between 2001 and 2012 – Only loans within this period are eligible for retroactive claims.
- Existence of a floor clause – The mortgage contract must include a clause that sets a minimum interest rate.
- Lack of transparency and overpayment – The bank must have failed to clearly explain the clause, and the borrower must have actually paid more than they would have if the interest rate had fallen below the floor.
- MORTGAGES AFFECTED = SOLBANK, BANCO SABADELL, BANCO POPULAR, UNICAJA, ELMONTE, CAJADUERO, CAJAESPAÑA, CAJASUR, and MORE
If all three conditions are met, customers can demand reimbursement of all amounts overpaid – and in some cases EVEN IF YOU SOLD YOUR PROPERTY, retroactively for many years.
Enter the Lawyer Who Took on the Banks
While banks denied responsibility and insisted customers had signed what they were given, one Spanish lawyer began systematically challenging the practice — case by case.
Diego Echavarría, a specialist in banking and consumer law, has helped recover more than €3 million for 150 British clients affected by unfair floor clauses, through court rulings and settlements with Spanish banks.
“For years, customers were made to feel it was their fault,” Echavarría explains. “But European law is clear: if a clause is not transparent, it cannot stand.”
John Lewis was one of those clients.
“When Diego explained the clause to me in plain English, I was shocked,” Lewis says. “It was all there in black and white, but completely hidden in legal jargon. Thanks to him, I finally got my 15000 euros back.”
Spain’s Banks Prepare to Pay Out
The scandal has hit the banks’ bottom line hard. Spanish lenders have now provisionally put aside €200 million to cover all floor clause claims – a staggering figure that underlines the scale of the problem.
Despite the payout, the reputational damage is clear. Customers feel betrayed, trust has been eroded, and many are wary of Spanish mortgages even today.
Europe Blows the Whistle
The scandal exploded in 2016, when the European Court of Justice ruled that banks must refund all money unfairly charged under non-transparent floor clauses – not just part of it.
The judgment sent shockwaves through Spain’s banking sector and forced lenders to repay billions of euros. What banks had long defended as “standard practice” was officially exposed as unfair.
Money Returned – But Trust Destroyed
Although compensation has been paid, critics argue the damage goes far beyond money. Years of financial stress, broken trust, and ruined retirement plans cannot simply be refunded.
For British homeowners in Spain, the floor clause scandal remains a bitter reminder that the biggest risks are often hidden in the smallest print.
As John Lewis puts it: “I loved Spain. I just wish I’d known what I was really signing.”
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