Opening commission: what is it and when is it abusive?

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The origination commission for a mortgage loan has brought a lot of controversy after the CJEU ruling of July 16, is it legal or is it an abusive commission? In today's article we will see what it is and when it is considered an abusive clause.


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What is an opening commission?
The opening commission is a percentage, which is usually between 0.5 to 1% of the total loan , and is applied when contracting a mortgage loan.

To apply the percentage, the banking entity will have to carry out a study with the following data:

Mortgage conditions: interest, repayment period, loan capital and type of mortgage.
Client solvency analysis.
Drafting the loan contract , which includes the exact amount of the opening fee.
What was the ruling of the Supreme Court?
On , the Supreme Court declared that the opening commission Chinese Overseas America Number Data was not abusive, buthey finished concluding this aspect of the loan:

Commission costs: The opening commission comes from two costs of the banking entity: the money it charges from the interest and the solvency study.
Reasons for charging the commission: The client must know in detail the reasons why the commission is being charged and it must be written down when and how much it will be charged.
Lack of transparency. If it is not well stipulated in the contract, the client can allege lack of transparency to declare the clause void.
When is it abusive? It will only be considered an abusive clause when the bank cannot demonstrate that this commission is justified by certain services and expenses.
So, as a general rule, the bank may charge you an opening fee, but it is important that you read the contract before signing it. Also, keep in mind when reviewing it that since the Mortgage Law , entities cannot charge you a commission for study, so if you detect it, you can claim it.

Opening commission



When can they charge you a commission?
Now that you know that the bank can charge you a commission, let's see in which cases it is not considered abusive:

The contract must clearly state which services it corresponds to.
The opening commission should include: solvency study and the work that the bank has to process your mortgage.
The bank has to be completely transparent about the application of the commission and you have to be informed at all times.
So you can claim the commission as long as it is not clearly stipulated in the loan contract or if you can demonstrate that there is no service that the bank is offering you that justifies the commission.