2023-05-06 23:30:16
Saturday, May 6, 2023, 11:28 p.m.
Can the financial institution charge you a commission for opening a mortgage loan? Is it mandatory to pay the bank for the opening of a mortgage? Who assumes the payment for opening a mortgage loan file? There are many doubts that arise in relation to this type of charges linked to the purchase of a home.
The opening commission on mortgage loans is a charge that several financial institutions apply to their clients. This commission is generally calculated as a percentage of the total loan, it covers the costs of study, processing, granting and other similar expenses associated with the mortgage loan. This commission is charged only once and is paid to cover the study of expenses, study of risk and, in general, the work that the financial entity entails to process the loan.
Before the new mortgage law of June 2019 was approved, banks could charge clients commissions, both for opening and studying the mortgage. However, from that moment on, and with the new Mortgage Law, only the opening commission can be charged to the client, which must include all the costs that each entity wants to pass on to its client.
In the event that the bank finally decides to grant the loan and that the client accepts the rest of the conditions, the entity will charge an opening commission that is usually between 0.5% and 1% of the amount borrowed and is included in the general calculation of the loan.
Although setup fees are regulated by law, and can only be charged once, some courts have questioned the validity of this clause. The Supreme Court of Spain, in January 2019, ruled that the arrangement commission is valid and forms part of the price of the loan, along with the interest rate. Likewise, the court pointed out that most consumers are aware of this commission and that financial institutions are obliged to report on it.
However, the Court of Justice of the European Union (CJEU) in 2020 expressed a different opinion, arguing that an origination fee cannot be considered an essential benefit of a mortgage loan simply because it is included in its cost. The CJEU maintains that the opening commission is not transparent by itself and must be subject to transparency control. Ultimately, it is up to the judge to determine whether the commission is clear and understandable.
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