What is the IRPH for mortgages?

The IRPH (Índice de Referencia de Préstamos Hipotecarios) is a reference index used in Spain to fix the interest rate of mortgage loans. It was created with the aim of offering an alternative to the Euribor, which until then was the main reference index for these loans. If you need to claim the IRPH on your mortgage, get advice from a specialist lawyer.

The IRPH is based on the average of the interest rates of 3-year mortgage loans granted by the savings banks, which were very important financial institutions in Spain at the time. This index is published monthly by the Bank of Spain.

The use of IRPH as a benchmark for mortgage loans increased significantly in Spain during the 2000s, and it became one of the most widely used benchmarks for this type of loans.

However, in recent years the transparency and objectivity of the IRPH has been questioned, and its use has been criticised by various experts and those affected. This is because the IRPH has remained at higher levels than other benchmark indices, such as the Euribor, for long periods of time, which has resulted in additional costs for borrowers.

In addition, there are complaints about the lack of transparency in the formula used to calculate the IRPH, which has raised doubts about the objectivity of the index. For example, it has been pointed out that the HPRI includes a number of features that make it less sensitive to interest rate fluctuations, which has contributed to keeping it at high levels.

In response to these criticisms, in 2018 the Spanish government announced a series of measures aimed at improving the transparency of the IRPH and reducing its use. These measures include the obligation for banks to inform customers about the different benchmark indices available and the costs associated with each of them, as well as the obligation to include in mortgage loan contracts a clause allowing borrowers to choose their preferred benchmark.

How to claim the IRPH of a mortgage?

If you believe that your mortgage is referenced to IRPH and you want to claim the clause, we explain the steps to follow:

• Review the mortgage contract: Before initiating any action, it is important to review your mortgage contract to check if it is referenced to IRPH and under what conditions. You should look for the clause in which the reference index is established and understand the applicable terms and conditions.
• Request additional information from the financial institution: If you have doubts about the content of the clause, you can request additional information from the financial institution to clarify your doubts.
• Assess the viability of the claim: Once you have all the relevant information, you should assess whether your claim is viable. You can seek legal advice to determine whether you have a strong case.
• Submitting the claim: If you decide to claim the IRPH clause, you can submit the claim to the financial institution or to the courts. It is important that you prepare full and detailed documentation to support your claim.
• Wait for the response from the financial institution or the court: Once you have filed the claim, it is important to wait for the response from the financial institution or the court. If the lender rejects the claim, you may choose to continue with the court process.
• Go to court: If you decide to go to court, you will have to appear before a judge to present your arguments and evidence. It is important to be prepared for the court process and to have a lawyer representing you.
• Wait for the judge's decision: Once you have presented your case to the judge, you must wait for the final decision. If the judge decides in your favour, the financial institution must make the necessary changes to your mortgage.

It is important to note that the claims process can be lengthy and expensive, and there is no guarantee of success. However, if you believe that your mortgage is linked to an unfair term and you have a strong case, it is worth considering a claim.

Types of IRPH

There are three types of IRPH:

1. IRPH Entities: This index is calculated from the arithmetic average of the interest rates applied by credit institutions to mortgage loans with mortgage guarantee. It is a broad index that reflects the evolution of mortgage loan prices in the market.
2. IRPH Savings banks: This index is calculated from the arithmetic average of the interest rates applied by Spanish savings banks to mortgage loans with mortgage guarantee. It is a more imitated index than IRPH Entities and refers specifically to savings banks.
3. IRPH Banks: This index is calculated from the arithmetic average of the interest rates applied by Spanish banks to mortgage loans with mortgage guarantees. Like the IRPH Savings banks, it is a more limited index than the IRPH Entities and refers specifically to banks.

It is important to note that all three types of IRPH are used as a reference to set interest rates for mortgage loans, but they are not official indices. Each financial institution is free to choose the index it considers most appropriate for its operations and can set the interest rate according to its own criteria.

How can I find out if I have an IRPH on a mortgage loan?

There are several ways to find out, but the most important is to review your loan contract.

• Check your loan contract, it is the first step to find out if you have an IRPH on a mortgage loan.
• Ask your financial institution
• Check your account statements
• Compare with other mortgage loans