Swiss francs mortgages: Bad advice bad timing!

18th November 2014 by

Few bank managers back in 2006 were aware of the consequences of signing the terms of the conditions of the Swiss Francs mortgage  with their customers. Fewer bank employees were in a position to explain the dangers that this product had for the clients.

The main argument to market Swiss francs mortgages on behalf of the banks was that the interest rate (LIBOR) was lower than the one of EURIBOR at that time. Nevertheless, they were never expecting that the swiss Francs currency will fluctuate so dramatically against the Euro.

The result was obvious and fast. Many borrowers found themselves in the funny position to owe more money than they have originally borrowed. Moreover, they now had a higher interest rate than then one they had originally signed since after the outbreak of the financial crisis Euribor went down to almost 0,25%.

The Swiss francs mortgages have been challenged before the European courts. The outcome up until now is in favour of the unsuspecting borrowers who without knowing it,  they have “gabled” their property in the “forex” market exchange.

Greek courts also have ruled that the Banks cannot follow the “fast track procedure” of the payment order against British Expats, since this procedure require to reside permanent in Greece .

It seems that the tendency  by the Courts in National as well as in European level is take a brave initiative so as to resolve this problematic situation based their arguments on the grounds of the negotiating inequality between the banks and the customers.

For more information on this topic or on the services we provide, please contact Marios Pattihis onmarios.pattihis@healys.com.