Cabinet gives green light for new mortgage law bill

The Ley de Crédito Inmobiliario, which now goes to Congress to be debated, is expected to be approved next spring

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Minister for the economy, Luis de Guindos, after last Friday's cabinet meeting (Photo: EFE)

MARIANO Rajoy’s cabinet on Friday approved a bill that aims to reduce costs generated by changes clients make to mortgages and create more transparent transactions with Spain’s banks, after the floor-clause fiasco which saw thousands of clients unknowingly tied into above-market mortgage rates.

The bill will lower early cancellation fees for variable-rate mortgages, eliminating them all together after five years, said minister for the economy, Luis de Guindos, on Friday. Although this part of the proposal will only apply to mortgages taken out after the bill becomes law.

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