How do I calculate the amount to claim from the floor clause?
If you’re one of the many affected people by floor clauses, you should know what and how much you can claim. Coming next, all the information you need to know the amount you can claim to the bank along with a practical example to make you understand it better.
Necessary information
If you want to calculate how much the bank owes you, you have to meet the following information:
- Date: month and year in which the mortgage was signed.
- Amount: amount lent by the Bank.
- Deadlines: Time agreed with the bank to pay the mortgage.
- Differential: fixed part that must be added to the reference index. A loan to Euribor 1 means that you have to pay the interest of Euribor and one extra percentage point.
- Floor: the minimum percentage set out to pay in your floor clause.
What are you going to be able to claim?
The bank will make you believe that you can only claim the difference in fee paid, in other words, the difference between the fee paid with floor clause and the fee to the correct rate. However, it is not so, since you can also claim the legal interest rate of money and the difference of the loan capital. Coming next, an example of each claimable element so that you understand it better:
To begin with, we are going to be based on the premise that these are the characteristics of our mortgage loan:
Amount: 350,000€
Date of grant: 2008
Fee to pay with floor: 3.5%
Amortization period: 25 years
Difference of paid fee
The monthly fee to pay would be €1166,66 plus interests. In this case our floor is 3.5%, which translates into € 40,83 of interests payable per month, €490 interests a year and €4410 in 9 years. However, if the Euribor would have approximated 1.5% over these years, we should have paid € 17.49 of interests per month, € 210 per year and €1890 during the 9 years that we have been paying the mortgage. Subtract the paid fee with floor clause and without it and the bank would have to return a total of €2520.
Legal interest rate of money
The bank has retained €2520 for 9 years, so the legal interest rate of money must be applied. If we calculate that interest at 3%, they would have to pay you an extra of € 75.6.
Difference of the loan capital
Well, the loan with floor clause (3.5%) is a total of €362.250 payable over 25 years. Since the fee payable per month with floor is €1207,49, over 9 years you have paid €130.410, so, if we make the difference between the loan with floor and what we paid in 9 years, the result is that we have still have to pay € 231.840.
However, the loan without floor clause (1.5%) is €355.250 to pay also for 25 years. The fee per month without floor would be in this case of €1184,15, so in 9 years you have paid €127.888, and if we make the difference between loan without floor and what’s been paid for 9 years, the result is that we still have to pay € 227.362.
Ultimately, making the subtraction between €231.840 and €227.362, it leaves us that we amortized €4478 less paying the loan with floor clause for 9 years, so you must also claim that amount.
Total
Making the sum of all (2520 + 75.6 + 4478), the amount that the bank should give back in this case is €7073,6.
Calculators: How much can I claim?
You can perform the calculation of your claim through calculators, such as the one offered by the “Junta de Andalucía”. It is the most reliable one.
Any doubt?
Check out our legal floor clauses guidelines to clarify your doubts or you can either refer them to any of the attorneys from our directory.
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