IRPH mortgage loan benchmark index in the line of fire

Raymundo LarraĆ­n Nesbitt, September, 11. 2019

Marbella-based Larraín Nesbitt Lawyers has over 16 years' taxation & conveyancing experience at your service. We offer a wide range of 40 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2019. Plagiarism will be criminally prosecuted.

By Raymundo Larraín Nesbitt
Lawyer - Abogado
11th of September 2019



The ECJ's Attorney General passed yesterday a formal opinion on the latest scandal that engulfs the Spanish banking sector: IRPH index in mortgage-backed loans.

Although his opinion is not binding, the fact is that the ECJ normally follows his legal opinions and acts upon them. The ECJ will rule next January 2020 on this clause which affects over one million mortgage loans in Spain.

His opinion basically was that the elaboration of this index, which dates from 1994, is convoluted and your average layman has no hope in hell in understanding how it is calculated and how it works. Shocking, who would have guessed?

Spanish banks allegedly may exert a ‘certain’ degree of control over the IRPH (which happens to be calculated in Spain), as opposed to the EURIBOR (which is calculated at a supranational level, European-wide). The fact is the IRPH has remained stubbornly higher (significantly so) than the EURIBOR rate by at least 100 basic points, no less. Needless to say, this surprising deviation (given the QE policy of the ECB to flood the money markets with cheap money in an attempt to stave off a severe Great Recession) favours lenders greatly which just may go on to explain why Spanish lenders have proven so very keen over the last decade to push and reference all new mortgage loans to the IRPH index in lieu of the EURIBOR. But that’s just idle speculation on my part, who knows?

As a result of the formal opinion of this ECJ high-ranking lawyer, it is highly likely the ECJ will rule next January against the IRPH, considering it an abusive clause. Needless to say, this will open the floodgates to yet another tidal wave of litigation against the beleaguered Spanish bank sector which already struggles to remain afloat in the wake of hundreds of thousands of lawsuits lost. Experts estimate the compensation due to borrowers starts at 4 billion and may go as high as 44 billion euros, depending on the retroactivity of cases.  

Logically, when the news broke out, it triggered a massive stock slide which resulted in the banking sector being mauled.

Fun fact: Spain’s Supreme Court ruled back in 2018 (in favour of banks, surprise!) that the IRPH index was in fact transparent and legal and quashed all consumer cases on grounds of an abusive clause.

It will be most interesting to read next January the ECJ’s ruling on this matter which, in all likelihood, will neatly overrule Spain’s Supreme Court criteria - yet again - in favour of consumers, borrowers and struggling families at large. Ah, déjà vu.

My heart goes out to lenders, bless their warm hearts.


We offer the most competitive fees in the market.

Conveyancing – Buying

We are specialized in conveyancing


Larraín Nesbitt Lawyers, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, inheritance, taxation and litigation. You can contact us by e-mail at, by telephone on (+34) 952 19 22 88 or by completing our contact form.


Legal services Larraín Nesbitt Lawyers can offer you


Mortgage-related articles



Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. No banker was harmed on writing this post. VOV.

2.019 © Raymundo Larraín Nesbitt. All rights reserved.