Obligatory content of a loan or mortgage loan contract.
Loan and mortgage contracts granted by companies must conform to the guidelines set forth in Order 5 of May 1994 regarding the transparency of mortgage loan financial conditions by banks, savings banks and credit institutions.
The contracts must include, where applicable, the contractual rights of the parties to change the total cost of the loan or mortgage. Companies offering variable interest rate products may use as a reference those indexes which meet the following conditions:
I) Do not rely exclusively on the company, nor can they be influenced by the company through the company´s practices or through agreements with other companies or organizations.
II) Are based on data that is calculated according to objective mathematical procedures.
Individual notification to consumers regarding changes in the interest rate of variable rate mortgages and loans shall not be required when both of the following circumstances are met:
a) An official index or reference rate according to Order 2/1994 has been agreed to by both parties.
b) The interest rate applicable to the loan or mortgage is defined according to points A and B in Number 1, Clause 3 of Annex II, being:
Point A) : The sum of a constant margin (positive, null or negative) expressed in points or fractions of a point.
Point B) : A certain percentage of the reference interest rate.
According to Provision 17.5 of Law 2/2009, the Notary deeds for loans or mortgages granted by companies will contain, properly segregated in the body of the document, the financial terms which must be established according to Annex 2, Order 2 of May 1994.