Question-02. Are “Floor Clauses” illegal?

While “floor clauses” themselves are not illegal, in December 2016 the European Court of Justice ruled that many mortgages containing a “floor clause” were unlawful.
The scandal was that these floor clauses were not adequately explained, or even not mentioned at all to borrowers, many of who did not know these clauses were buried in the small print of their mortgage contracts.
Foreign borrowers in particular were likely to be unaware of the existence and implications of floor clauses, thanks to language barriers and living outside Spain in many cases.