Banesto’s Tranquilidad mortgage that makes you lose sleep

hipoteca tranquilidad
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When the property bubble began to burst and interest rates were expected to fall, the former bank Banesto, now part of Banco Santander, began to offer what it called the “Hipoteca Tranquilidad” to a particularly young public.

The sales pitch for this product was more than attractive. It was something suggesting that you buy your house with peace of mind, during the first 10 years paying a fixed monthly instalment at an interest rate of 5.75% and in the remaining years the instalment would be calculated using Euribor or IRPH, plus the differential plus an increasing instalment of 2 or 2.5%, depending on the case.

What was not part of this discourse and was not communicated to the young customer was that, while, during the first 10 years the instalment would be fixed and would have an interest rate of 5.75%, in reality only interest would be paid and the debt would hardly be amortised, so that from the tenth year onwards, the amount owed would be practically the same as at the beginning.

Let us take an example, comparing the tranquillity mortgage with a traditional mortgage, for a mortgage loan of €170,000, the economic damage caused would be more than €51,000.

The bank knew, when it was offering the Hipoteca Tranquilidad, that in the short term interest rates were going to fall and, with this product, it was assured not only to charge during the first 10 years an interest rate higher than the market rate (specifically 5.75% interest), but also that during the following years the instalment would be at least 2 or 2.5% above the Euribor or IRPH plus the differential.

It is now, as the first ten years have come to an end, that the people who took out this product are realising the magnitude of the deception, discovering that they have barely amortised the capital Banesto lent them and that in the coming years their repayments will only continue to grow.

However, the good news is that if you have taken out a Hipoteca Tranquilidad with Banesto you can claim in court for abusive practices, deficiencies in the information provided to the client and, consequently, a breach of consent.

At our firm, specialised in Property Law and Banking Law, we are seeing every day how judges are sensitive to the abuses committed by financial institutions during the end of the real estate boom. Floor clauses, multi-currency mortgages, IRPH, swaps, Santander Securities, Banco Popular Convertible Bonds, amounts advanced with or without bank guarantee in the purchase of off-plan homes are just some examples of these abuses in which Bufete Salmerón already has hundreds of favourable resolutions for the consumer. Call us and we will help you.


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