Although the Euribor is by far the best-known reference index for variable-rate mortgages in Spain, it isn't the only one that's been used: the IRPH (Índice de Referencia de Préstamos Hipotecarios, Mortgage Loan Reference Index) was especially common at certain lenders, mainly savings banks, and has been the subject of intense legal controversy in recent years.
What the IRPH is
The IRPH is a reference index calculated from the average interest rates that banks themselves apply to their mortgage lending, unlike the Euribor, which is calculated from the rate at which banks lend each other money in the interbank market, with market dynamics independent of the specific rates each bank decides to charge its own customers.
Why the IRPH has often turned out more expensive than the Euribor
Because it's calculated from the very interest rates banks apply to their mortgages (which already include their profit margin), the IRPH tends to be structurally higher than the pure Euribor, since the latter includes no banking margin in its calculation. This means that, in many cases, a mortgage referenced to the IRPH ends up costing more than an equivalent one referenced to the Euribor with the same agreed spread.
The lawsuits over the IRPH
Much like what happened with floor clauses, there have been numerous court claims related to mortgages referenced to the IRPH, alleging a lack of transparency in the information given to consumers about how this index worked and how it differed from the better-known Euribor at the time of signing. Unlike floor clauses, case law on the IRPH has been more nuanced and has evolved through various rulings, including from the Court of Justice of the European Union, without as uniform a resolution as in the floor clause cases.
How to find out which index your mortgage uses
Check your mortgage deed: in the section on the variable interest rate, it must expressly specify the reference index applied (12-month Euribor, the combined-entity IRPH, or other less common indices), together with the agreed spread over that index.
There are several variants of the IRPH
The IRPH isn't a single index; several variants existed (IRPH for banks, IRPH for savings banks, IRPH for the combined set of entities), with slightly different values from one another. After various regulatory changes, some of these variants stopped being published, which has also generated additional lawsuits over which replacement index should apply in those cases.
What to do if you have a mortgage referenced to the IRPH
If you're unsure whether your IRPH-linked mortgage could be grounds for a claim, it's worth consulting a professional specializing in banking law, who can assess your specific case in light of the most recent judicial criteria, which continue to evolve.
Compare the cost of different scenarios
Our mortgage calculator lets you simulate your installment under different interest rates, useful for comparing how much your mortgage would have cost under one index versus another over time.