Until now, the usual trend was that the banks forced take out home insurance when applying for a mortgage. The banks conditioned the granting of the mortgage to the contracting of the insurance, or as a condition to reduce the differential that they apply to the Euribor.
It has practically become a general rule that when taking out a mortgage the bank requires you to take out home insurance, and even a life insurance. The European Parliament, in order to improve consumer rights, intends to put an end to this abusive practice.
In 2014, the European Parliament approved the Directive 2014 / 17 / EU . With it, it prohibited banking entities from linking the contracting of mortgages with that of other products (such as home insurance). This is intended to eliminate the bad practices of some banks, which force their customers to take out insurance linked to their mortgages. This directive forced to modify the Spanish Mortgage Law. In March 2019, the 5 / 2019, which expressly prohibits the sale of services linked to the mortgage and mandatory for its approval. If the combined sale of complementary products is allowed in exchange for lowering the interest rate.
What does the application of this measure entail?
This measure has had a positive impact for Spanish consumers, since they will be able to choose the home insurance that best suits their needs and the characteristics of their home. Hiring insurance should be entrusted to professionals in the sector, who will be able to offer the client a detailed study of what he really needs. Thus, the client will not only have the best insurance, but it will mean considerable savings.
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