Banking products and services
This is the share of your net monthly income you can use to service your debts (i.e. pay capital and interest) without undermining your and your family’s ability to meet other financial commitments. It should not exceed 40%.
Note that the 40% limit is the recommended maximum level of total debt, and also includes payments for any other debts you may have, such as a car loan or student loan, together with hire purchase and credit card payments.
In other words, households should have a least 60% of their net monthly income available to pay for food and clothing, bills, and with a little planning, leave something left over to save each month.
Membership is notified to the General Secretariat of the Treasury and International Financing. To find out if your institution is signed up, consult the list of signed-up institutions published in the Official State Gazette.
There is no central register of guarantees that records all the guarantees banks have granted. Each bank is required to set up its own Special Register of Guarantees to record the guarantees that it issues.
This obligation derives from Banco de España’s Circular No. 4/2017 (in Spanish)
If you are not sure, you can request a detailed credit report from the Banco de España’s Central Credit Register – CIRBE by its Spanish abbreviation – which will also show indirect exposures, as well as the bank with which they have been arranged.
You can ask your bank to do this. It should help you switch accounts swiftly and efficiently.
Banks should cooperate and exchange all the necessary information between each other and you to ensure that the switch goes well. Also, your bank will transfer any money you may have in your old account to the new payment account.
These transfers are free of charge between payment service providers operating in Spain or within the same provider.
How is income calculated to determine whether I’m within the exclusion threshold? 12-payment IPREM (Multipurpose Public Indicator of Income) or 14-payment IPREM?
The regulation refers to the income of the entire household unit. Therefore, all such income must be taken as a whole.
Following the latest amendments to the Code of Good Practice, the annual income limit for beneficiary households is calculated based on the annual 14-payment IPREM.
Under Payment Services Royal Decree-law 19/2018 of 23 November 2018, you are entitled to a refund of payments made under previously authorised direct debits, where you did not specify the exact amount in the authorisation and where this amount reasonably exceeds what you could have expected in view of your previous payments, the conditions of your contract and other relevant circumstances (Article 48 of Royak Decree-Law 19/2018 (in Spanish)).
In these cases, you have eight weeks within which to request a refund of your payment as of the date the funds were debited from your account. Within ten working days of receiving your request for a refund, the bank must credit the amount of the direct debit to your account or justify its refusal to provide a refund, in which case it should indicate the relevant claim procedure.
If you did not previously authorise the direct debit, Royal Decree-Law 19/2018 says you should notify your bank of the unauthorised transaction without undue delay, specifically within no more than thirteen months of the debit or payment date.
In the case of customers not classed as consumers, a shorter period may apply (Article 34 of Royal Decree-Law 19/2018 (in Spanish)).
1. Five-year interest-only period.
2. Lengthening of the repayment term to a maximum of 40 years from the loan origination date.
3. Reduction of the applicable interest rate to Euribor + 0.25% during the interest-only period.
Any floor clauses set out in the mortgage contract shall not apply.
And if you decide to repay the mortgage in advance during the ten years following approval of the restructuring plan, the bank will not be able to charge you any compensation fee.
The measures envisaged are to be applied successively. The first is debt restructuring. If this is not viable, you can request a debt reduction, i.e. a reduction in the capital, or a deed in lieu of foreclosure. Lastly, if the house has been foreclosed, you can apply to rent it at a favourable rate.
- Never keep a note ofyour PIN with your card, or in your handbag, purse or wallet. It is safest to memorise it.
- Avoid using a predicable number for your PIN, such as your birthday, ID card number, etc.
- Show some form of identification when using the card.
- Take care of your privacy when using your card in shops and at cash machines (ATMs).If you do not use your card often, check from time to time that you still have it in your possession
- Check your account statements to identify any suspicious transactions.
- Keep the emergency phone number provided by your bank where it is easy to find, but never with the card.
- Never leave your card number in plain sight or disclose it to anyone.
- Keep any documents with your name and card number on them, such as receipts, in a safe place or else destroy them.
- Do not use your credit card as a means of identification.
- When using your card online you should use at least three of the following security measures: PIN, signature, security code card, text message, password, security token, fingerprint, etc.
Banks have the option of either waiting for the cheque to clear before crediting the customer’s account or crediting the account straight away, subject to the cheque’s clearing. Either way, the account credit depends on the cheque’s actually being paid, so if the cheque fails to clear, any credited amount must be repaid, and a charge will be levied. Banks are required to inform customers if this happens.
Banks will sometimes inform account holders that the money paid by cheque will not be available for a few days. This is because there is a difference between the date on which the account is credited and that on which the funds actually become available. Good banking practice on clarity and transparency require banks to give full information to customers when they present a cheque for payment. In particular, customers must be informed that the funds will not be available until the cheque has cleared.
Financial difficulties can result in failure to keep up with mortgage repayments. These can build up and generate late-payment interest and arrears charges. If the bank takes legal action, court fees will be accrued in addition to the debt.
The restructuring plan must cover the entire mortgage debt, including the past-due principal, late-payment interest, arrears charges, fees and costs.
The bank cannot demand that you pay all outstanding instalments prior to applying the Code, since these amounts constitute “mortgage debt” and must likewise be subject to restructuring. See the Oversight Committee´s response (70 KB).
Further, the bank may consolidate the borrower's debt - credit cards, overdraft, personal loans -, but it is not required to do so. See the Oversight Committee´s response (78 KB).
Do all the holders have to give their consent to withdraw money from a jointly held deposit or cancel it in advance?
If the terms and conditions of the time deposit state that any of the holders can sign (‘disposición solidaria’ or ‘disposición indistinta’ in Spanish), then any of them can withdraw money as if he or she were the sole holder.
However, in order to cancel the deposit, all the holders must give their consent, unless other some other agreement exists or the terms and conditions state otherwise.
Not necessarily. If a new deed setting out the new conditions of the loan – the restructuring plan – is not executed, those conditions will be binding between the debtor and the institution. That said, the agreement could not be recorded in the real estate registry, and therefore it would not be enforceable against third parties, who would be unaffected by the changes.
If, conversely, the restructuring plan is public deeded, the new conditions will be enforceable between the parties to the agreement and also vis-à-vis third parties, once it is filed with the real estate registry.
While deed execution is voluntary, either of the parties (the borrower or the bank) may request the same. In this case, the cost of that deed execution shall be borne by the party that requests it.
Before it gives you a guarantee, your bank must inform you about the various ways in which the guarantee may be terminated. Among other things, the information it gives you must expressly state whether you need to return the original document in order for the bank guarantee to be cancelled.
If it was agreed that the return of the original document is a requirement for discharge of the guarantee, the bank may require you to return it before it stops charging the periodic fee for providing the guarantee.
It is considered good banking practice for banks to waive the requirement to return the original document when other evidence is given to show that the liability has been met.
Spanish banks and other deposit-taking institutions are members of the Spanish Deposit Guarantee Fund and therefore deposits and accounts are guaranteed up to a limit of €100,000 per holder, regardless of the number and type of deposits held.
Some branches of authorised financial institutions outside the European Union are also members of the Spanish Deposit Guarantee Fund, when deposits or guaranteed securities are not covered by a guarantee scheme in the country of origin, or if such coverage is lower than that in Spain, thus requiring an additional amount to make up the difference.
Taking out a mortgage involves paying certain expenses including notary fees, registration fees, agent’s fees, taxes and the cost of the valuation. In many cases these charges are passed on to the consumer taking out the mortgage.
In terms of the legal situation, the Spanish Supreme Court’s Judgment of 23 December 2015 (No. 705/2015) of declared a lender’s contractual clause passing on all the taxes and costs involved in setting up a mortgage to the customer to be null and void on the grounds that it was unfair.
Good banking practice dictates that mortgage lenders should study complaints received from customers in the light of the Spanish Supreme Court’s judgment.
No. Unless this is expressly stated in the terms and conditions or the bank gives you two months’ notice of a contractual change to this effect.
The way in which banks provide cash services, including cash withdrawals and deposits, is at their discretion and depends on their commercial policy. It is for you to consider this issue and to decide whether you wish to remain a customer.
However, if your bank only allows ATM-based cashier services, this restriction must be included in the terms and conditions of the account. If this restriction is imposed subsequently, the bank must give two months’ notice so that you can decide whether or not to remain a customer.
Banks must notify small businesses (SMEs) at least three months in advance if they intend not to continue the credit they have been giving or to reduce it by 35% or more (Article 1 of Law 5/2015 (in Spanish).
When your bank approves your request for a credit facility, it is considered good banking practice for it to notify you of the approval within a reasonable period of time, and you should also be notified of refusal of a request for a credit facility as soon as possible so you can seek finance elsewhere.
Law 2/2011 on the sustainable economy (in Spanish), and the subsequent Law 16/2011 on credit agreements for consumers (in Spanish) contain several provisions for both the protection of customers and financial institutions in relation to requesting and granting financing, respectively.
Financial institutions must act impartially and take customers’ personal and financial situation into account. They must have methods and procedures for advising on, assessing and granting financing and a product marketing policy adapted to the needs of each specific case.
Lending is not an activity that is restricted to financial institutions but can be performed freely. However, most companies providing this service are subject to the regulations for financial institutions and supervised by the Banco de España.
Can the institution refuse to restructure debt on the grounds of the mortgage loan “losing priority”?
Mortgage priority refers to the position of each mortgage in the real estate registry and determines the priority of certain loans with respect to others.
A mortgage can lose priority when the loan conditions are changed so as to increase the mortgage liability figure or extend the term of the loan. Priority may only be preserved with the consent of the subsequent lenders.
However, any lender adhered to the Code of Good Practice is required to offer the borrower a restructuring plan that satisfies the requisites, with no exempting provision set out in the regulation.
The institution will have to find the means of fulfilling its obligation, duly considering, if applicable (and if the mortgage loses priority), the possibility of reducing or consolidating the debt, securing the consent of higher-priority rights holders, or any other suitable arrangement in the circumstances.
See the Oversight Committee’s response.
In certain cases, it can.
The decision to refuse to pay a direct debit can be made by the bank or by the customer who set up the direct debit, provided the amount has not already been paid into the payee’s account.
Reasons for refusing to pay a direct debit may include:
- Incorrect IBAN NUMBER
- Closed or frozen account
- The account does not allow direct debit mandates, for regulatory reasons
- Incorrect file format
- Insufficient funds in the account
- Duplicated transaction, invalid or non-existent mandate
- Death of the payer
- Rejection by payer (i.e. he/she gives instructions not to pay).
In the event of a payment being refused, the bank must notify the customer of the circumstances so that any errors can be corrected.
When you have several debts from different products in one bank, when a deposit is made, smaller debts are often serviced first and the mortgage instalment is charged afterwards if the remaining balance is sufficient to cover it.
If you want to avoid this situation, tell your bank which specific debt you wish to cover with the money deposited (this is what we call payment allocation). Do so in writing, so you have evidence of having placed the order if the bank does not carry it out.
A bank transfer may not reach the recipient even if it has been correctly carried out and the money has been debited from the sender’s account.
Under money laundering regulations, banks may block the transferred funds until they have checked the identity of each company or person involved in the transfer and they have obtained the documents that allow the link between the funds and the professional or business activity of the companies or persons involved to be confirmed.
Money laundering regulations also forbid banks from carrying out transactions with unidentified customers. In such cases, banks must inform customers what documents are required in order to certify the source of income or origin of the funds.
Current regulations on transparency (Ministerial Order EHA/2899/2011, of 28 October 2011 on transparency and protection of customers of banking services (in Spanish) which came into force on 29 April 2012, are not applicable to customers that are legal entities. However, the Banco de España’s Market Conduct and Claims Department considers that legal persons should also benefit from the traditionally held view that customers should not pay account maintenance or transaction fees when a bank requires an account to be held that is solely used for payment of the interest accruing on a deposit, for servicing a personal or mortgage loan, or for payments arising from other types of operation. In such cases, customers would be paying to comply with an obligation (to open an account for the bank’s convenience), imposed by the bank in its own interest, which is considered contrary to the principle of reciprocity and good banking practices.
Children can only open accounts through their legal guardians, generally their parents. Both parents or just one, provided they have the express or tacit consent of the other, will be able to operate the child’s account to make deposits, withdrawals and conduct other transactions.
Grandparents, siblings or other family members cannot open an account on a child’s behalf.
In some circumstances, parents may have their parental authority withdrawn or limited by the courts. Divorced parents may have an agreement for just one of them to have full or partial parental authority or this may have been decided by the courts.
Once the child turns 18 he or she will be able to use the account just like any other account holder.
The Banco de España’s Market Conduct and Claims Department considers that customers should be exempt from account maintenance and/or transaction fees in the case of accounts held at the bank’s behest solely for payment services deriving from banking transactions. This is because in such cases the customer would be paying to meet an obligation (opening an account to facilitate the bank’s administration), imposed by the bank in its own interest, which is considered contrary to the principles of reciprocity and good banking practices.
Can I be charged account maintenance and administration fees on an account associated with my mortgage?
This will depend on when your loan agreement was signed.
If you took out your mortgage before April 29th 2012 (when Ministerial Order EHA/2899/2011 came into force) you should not have to pay any account maintenance and transaction fees if the bank required you to open the account and it is used solely to service the mortgage loan.
However, if your mortgage loan was arranged after April 29th 2012, the Ministerial Order establishes that fees may be charged, even if the account is used exclusively to service the mortgage loan, but only under the following circumstances:
- It appears on the FIPRE and FIPER pre-contractual information documents.
- You were informed in advance about the requirement to open an account associated with the mortgage loan.
- You were informed of the share of the total cost of the transaction corresponding to account maintenance.
- The requirement to open the account and its cost are stated in the terms and conditions and this cost cannot be changed unilaterally by the lender over the duration of the loan.
Instant payments are not just immediate, but can be made 24 hours a day, 7 days a week all year round, including weekends and bank holidays.
Both national and international instant payments have been available since November 2017.
Yes. You have 14 days from signing in which you can notify your lender that you wish to cancel the agreement without having to give any further explanation and without being charged a cancellation fee.
Customers can usually withdraw cash at any of their bank’s branches. If you take out money from a branch other than your account holding branch, the bank should ask you for identification and check that there is no reason why the money cannot be withdrawn.
Yes, provided that you are within the exclusion threshold you will be eligible for restructuring, but not the supplementary or replacement measures.
“Aportaciones de fondos” (fund contributions) no longer exist.
The type of payment services they were used for has been replaced by SEPA direct debits.
With SEPA direct debits the payee and payer may be the same party, and there is no limit on the amount of the direct debit mandate. The steps involved are:
- You have two accounts in two different banks and you want to deposit funds into the account in bank A, which in this case would be the payee of the direct debit.
- You instruct bank A to issue a direct debit mandate against the account in bank B, which would be then the party issuing the order or direct debit payer.
- This allows you to make the transfer without ordering a transfer to the account in bank B, which would make you liable for money transfer fees.
Three interest rates were excluded from the list of official rates in article 27 of Ministerial Order EHA/2899/2011 (in Spanish), and, consequently, are no longer deemed official reference rates for loans arranged after the Order came into force on 29 April 2012. However, they remain valid for those variable-rate loans that were arranged before that date for which they are the reference rates.
These three rates are:
- The rate for bank mortgage loans of over three years
- The rate for savings bank mortgage loans of over three years
- The savings bank lending reference rate (CECA indicator, lending rate).
The Banco de España stopped publishing these benchmark rates on 1 November 2013 and they were replaced by the rate stated in the loan agreement.
If there is no replacement rate or the replacement rate is one of those that has ceased to exist, the applicable rate will be the “average interest rate of mortgage loans over three years for purchasing unsubsidised housing, granted by Spanish credit institutions” (the bank mortgage loan benchmark index) plus a spread.
Calculate the spread with our calculator
When purchasing expensive items such as furniture or electrical appliances, or paying for services such as dental treatment, you may often be offered the option of financing them with credit, usually from a bank.
When the credit is used exclusively to finance the purchase or the service, the credit and the purchase form a single contract, so if you decide to stop the dental treatment, for instance, you will cease to be liable for the credit.
Moreover, if you are not satisfied with the service received, you can exercise your rights against both the company providing the service and the bank that provided the credit.
- Check if your bank is signed up to the Code of Good Practice.
- If so, find out more on its website or at its branches.
- Submit an application, along with the documentation evidencing that you meet both the economic and housing price requirements.
The bank must provide you with all the help you need, both with the application form and with the supporting documents to be submitted in order to request the application of these measures.
- You can repay the credit over a period of time, with instalments that vary according to the outstanding balance or how much you wish to pay, within the limits set by the bank.
- Each repayment you make increases the credit available on the card, such that the capital repaid will be available again as credit.
- Interest, fees and other expenses can also be paid on credit, as well as the cost of your purchase.
- If you choose to pay only a small amount of the accumulated debt each month, it will take longer to pay off and you will have to pay more interest.
- Also, if your payments do not cover the interest accrued over the period, the outstanding debt will increase.
- It is possible for your outstanding debt to increase rather than decrease even if you make all your monthly payments without fail over a number of years.
Use our calculator to find the date of the last repayment to clear an existing credit card debt (assuming no further purchases).
Banks are not legally obliged to change high-denomination banknotes for low-denomination ones, nor to provide foreign exchange services.
Banks may therefore charge for these services or for other services such as money counting, coin packaging, etc.
A restructuring plan is not viable when, although the debtor reaches the so-called "exclusion threshold" and the purchase price of the primary residence meets the limit, the instalments payable under this plan exceed 50% of the household unit's income.
A guarantee facility is a contract, usually between a bank and a company or self-employed person, whereby the bank undertakes to grant independent guarantees with specific characteristics, up to a certain amount, as requested by the obligor to meet business needs.
A demand guarantee is an independent joint and several guarantee in which the beneficiary can directly demand that the guarantor meet the underlying obligation in the first instance, without having first sought fulfilment from the obligor. When you are asked to provide a guarantee it will usually be of this type as it ensure maximum protection for the beneficiary.
Since Law 44/2002 of 22 November on Financial System Reform Measures (in Spanish) came into force, variable rates on mortgages can be rounded up or down to the nearest eighth of a percentage point, at most, provided that this has been agreed previously.
Yes. The fact that a mortgage loan has been securitised does not in itself exclude the application of the Code.
Banco de España does not provide this service and banks are under no obligation to do so either. Any banks that do will normally charge a fee. The European Central Bank website gives information on exchanging national currency and has links to the various national central banks.
Banks are free to ask from their customers any type of guarantee prior to granting the requested financing, depending on their commercial and risk policies.
If your bank asks you for a guarantee, it must:
- Provide pre-contractual information
- Explain the risks incurred adequately
- Inform you about the debt exactly as it would inform the obligor if it requires you (rather than the obligor) to settle it as guarantor.
The risks assumed will depend on the type of guarantee and the chances of the guaranteed party (obligor) not meeting their payment obligations. You need to be aware of the guarantee’s duration, as it will not usually be cancelled or discharged until the underlying obligation has ended.
As a rule, guarantees are given jointly and severally, such that the beneficiary of the guarantee is entitled to require either the obligor or the guarantor to meet the obligation. However, if the guarantor ends up complying with the guaranteed party’s obligations, he or she will be entitled to require reimbursement from the obligor of the amount paid together with interest and expenses.
If I am the guarantor of a mortgage loan, can I take advantage of the measures in the Code of Good Practice?
Yes. If the bank claims payment of the debt from you as guarantor and you reach the "exclusion threshold", you can benefit from the measures established in the Code of Good Practice.
That said, before the bank claims payment from you, it must first exhaust the principal debtor's assets.
How long does it take for money transferred by direct debit between accounts at different banks to be available?
Direct debits are a form of payment service commonly used to settle a variety of bills (utilities, taxes, etc.). However, account holders may sometimes use a direct debit to transfer money between their accounts so as to avoid the fees that banks can charge for transfers.
The legislation governs financial services users’ rights in relation to direct debits, ensuring they can order the recall of a direct debit charged from their account, and it sets two different time limits depending on whether the debit was previously authorised (eight weeks) or not (thirteen months), so as to safeguard customers’ rights.
However, these time limits in no way require the funds received to be unavailable for the duration of the time in which it is possible to recall the direct debit or any other period. Indeed, under the Payment Services Law, the receiving bank is required to make the amount transferred available to the account holder as soon as it arrives.
No. In fact, many companies giving credit with little paperwork, over short periods but at high cost –in the form of either high interest rates or fees– are not supervised by the Banco de España.
If you wish to find out whether a lender offering you a loan or from which you are considering borrowing is supervised by the Banco de España, you can check Banco de España’s Credit Institutions Register.
In Spain cheques normally have to be presented for payment within fifteen days of signing, but there is a six month period before their final expiry. This means that a cheque ceases to be valid six months and fifteen days after the date it was issued.
Bank cheques or banker’s drafts normally expire after five years, pursuant to the first final provision of Law 42/2015 (in Spanish).