This may be relevant if you took out a mortgage with a bank a few years ago. Spain’s Supreme Court has just issued a ruling that could affect thousands of people.

For years, many banks made customers taking out a mortgage purchase financed single-premium life insurance: an extremely expensive policy costing €20,000, €25,000 or even €30,000, paid in full and upfront rather than annually. It was almost always arranged with the bank’s own insurer, with no option to choose another company and without the cost being reflected in the APR, the indicator showing the true price of a loan.

The Supreme Court has now made its position clear: this practice is abusive. Making the insurance compulsory is abusive. Preventing customers from choosing an insurer is abusive. Failing to offer a cheaper option, such as a renewable annual premium, is abusive. And concealing its cost from the APR is abusive too.

The ruling unifies the approach of the provincial courts, provides legal certainty and requires the unused portion of the premium to be refunded to the consumer, with interest. It is a milestone for transparency and freedom of choice.

That is the key point: insurance linked to your mortgage is not the bank’s decision. It is yours. You have the right to compare, choose an insurer and take out the option that best suits you.

That is where insurance brokers come in: to advise you independently, without ties and with all the information on the table. If your mortgage includes insurance of this kind, get in touch with us. You may be pleasantly surprised.