English language newspaper for Ibiza, published and online every week.

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Mortgages
The Supreme Court in Madrid ruled last week that the minimum interest rate often included in mortgage agreements is illegal and that banks are not permitted to set a base level. This could well have a knock-on effect on mortgage lending, with banks granting fewer loans at higher interest rates. The court order comes as part of a package which aims to increase the transparency of mortgage agreements; until recently a bank could stipulate a "minimum" level of, for example 3 percent, and even if the base rate fell well below this figure, the borrower would not reap any benefit. Recently the "Euribor" rate (the Euro zone"s equivalent to the Libor) has been under one percent and is currently around 0.50 percent ensuring interest rates are the lowest they have ever been since the Euro was introduced.
The first two banks to announce that they would be eliminating such clauses from mortgage contracts in the future were BBVA and Cajamar; the former reported that the decision would result in a decrease in profits of up to 35 million euros.
A further stipulation of the new law will mean the consumer must confirm that he understands what he is signing, but Vicente Carbonell, a member of the board that oversees the College of Property Registrars, commented, "The only difference is that instead of signing just once, the consumer signs twice, but that doesn"t mean that he understands the contract any better".