On 12 December 2024, the Court of Justice of the European Union (CJEU) delivered its judgment in Case C-300/23, answering a reference from Court of First Instance No. 8 of San Sebastián. The decision addresses issues affecting borrowers whose mortgage agreements refer to the Spanish Mortgage Loan Reference Index (IRPH).
A more demanding transparency assessment
The CJEU reiterates the approach in its July 2023 judgment: national courts must assess whether the agreement satisfies the transparency requirement. This involves checking whether the consumer received the information needed about IRPH, including how it is calculated and the financial consequences of using it.
The judgment also addresses information available from public sources. The lender must provide sufficiently clear and precise guidance for an average consumer to understand that information without undertaking complex legal research. Drawing attention to publication of IRPH in the Official State Gazette may be relevant to transparency; failing to do so may indicate a shortcoming.
The negative differential
The article highlights the judgment’s discussion of a negative differential. It explains that, given the index’s calculation method, an adjustment may be relevant when comparing IRPH with market annual percentage rates. Where no adjustment was made or the consumer was not properly informed, this may contribute to an assessment that a term is unfair and therefore void.
The article contrasts this interpretation with the Spanish Supreme Court’s reliance on IRPH’s official status and its use in publicly supported housing finance. It explains that a lender’s good faith cannot be presumed solely because an index is officially regulated.
Invalidity and its effects on mortgage contracts
Another issue concerns the consequences of a finding that the IRPH term is invalid. The CJEU states that, if removing the term would make the contract unworkable, the court may be able to replace it with a supplementary provision of national law. At the time of publication, the article considers that no such provision existed in Spain, leaving uncertainty for the Supreme Court or legislature to address.
Implications for consumers
The article considers that this decision strengthens the position of consumers affected by IRPH and may support claims in certain cases. In particular, it points to insufficient information about the calculation method, failure to explain the relevance of a negative differential, and information that was not clear and accessible.
Montelirio Abogados y Asesores Tributarios has a Corporate and Banking department able to assess individual cases and possible claims. If your loan is linked to IRPH, contact the firm to review your circumstances and the available options.