Unfair mortgage terms

Compulsory product tie-ins such as life assurance can be in the form of a straight 500€ extra per year or up to a whopping 30,000€ lump sum policy simply added to your mortgage (so you are also paying interest on it.)
Compulsory deposits, “Yes you can have the mortgage but we will need you to leave 15,000€ in a locked deposit account with very low or zero interest as security.” Another ploy which has become more common as bank managers have come under increasing pressure to cross sell to their clients.

Changes to your mortgage a few days before you go to notary for completion. What are you going to do when go to a your Spanish bank of choice the day before you are due to sign only to be told that there has been a change of policy and your rate is now much higher than the one they originally promised? On top of that they have also withdrawn the interest only option you wanted meaning you are going to start paying a lot more than you thought.  This does happens- all too regularly and Spanish banks are more than happy to take advantage of foreign purchases who do not know or understand the legalities of such situations.
When such conditions are sprung upon unwary British and Irish clients (who can have tens of thousands of Euros at risk in deposits) there is very little they can do for fear of losing the mortgage product and many reluctantly accept these unfair terms hoping to switch lenders or remortgage at a later date (not only is this very difficult but it can be incredibly expensive.)

Mortgage “collars” where the mortgage interest rate can never drop below 4% for example. Many non-resident Spanish property owners have found this out much to their dismay as the Euribor dropped to less than 1.5% and they found themselves stuck on a high rate. most had no idea such a condition was a part of the mortgage they signed up for.

Branch level decisions given to people who have walked in off the high street have become one of the reasons for so many people losing deposits in recent years. As branch managers have for the most part had their underwriting authority withdrawn they have had less and less say in who actually qualifies for their mortgage products. Spanish banks have for the most part centralised all of their mortgage decision making and now the most a branch manager can do is increase interest rates or make it even more difficult to qualify. Because people (many of them atre estate agents) do not know this, they speak to someone in the Spanish high street and are given a verbal agreement or sent an email highlighting possible mortgage terms. Purchasers then pay over deposits on the back of this and are subsequently told there case has been rejected “at a higher level” and that they now need to apply elsewhere.