Mortgage loans are currently governed by the Mortgage Law (or real estate lending law). This law has been in force since 16 June 2019. It was introduced as part of the European Union's ongoing efforts to protect consumers, increase transparency and share costs between the bank and the customer.
This Law requires banks to provide buyers with several information documents, and requires buyers to approach a notary before signing for free advice and to take a test. It also protects customers from abusive clauses, strikes out clauses that breach applicable law and regulations, and sets up a specialist body tasked with handling complaints and claims.
As for cost sharing, the Law establishes a new apportionment of expenses when it comes to signing deeds and filing documents. The bank must meet all management, registry and notary costs, as well as stamp duty (known as IAJD) and the cost of obtaining its copy of the deed. Meanwhile, the consumer pays for the property valuation and for their copy of the deed, making it a better deal for them when compared with the previous law.
For the most part, this Law does not take retroactive effect, as it applies to mortgages that are arranged after its entry into force. However, it does contain two retroactive articles:
the first of these makes the conversion from variable to fixed rates cheaper, establishing a maximum fee of 0.15% if the rate is changed within the first three years of the mortgage. The second retroactive article determines when foreclosure will take place in the event of non-payment.