Fixed interest rate: What is that?
When taking out a loan, in addition to the actual loan amount, you always think about the agreed interest rate and the term. The interest rate can be fixed or variable. In order to have a certain security, especially with a fixed interest rate, this is usually guaranteed by the bank for a certain period of time, but after this time the so-called fixed interest rate ends and the interest rate must be renegotiated again, provided that the loan capital itself has not been fully repaid by then.
What many people do not know, however: With the setting of the new interest rate the bank has by no means free discretion, but is subject after the jurisdiction to strict rules, explains attorney Sascha C. Fürstenow.
Which are those and which you can do, if your bank does not keep to it, the following legal advice is to point out.
Determination of the new interest rate after the end of the fixed interest period
In order to understand what the default of the agreement of new interest rates is based on, it is necessary to know first of all that there are two types of interest rates: The contractual interest rate agreed individually between the bank and the customer and the so-called reference interest rate, which is provided by a neutral body, publicly available, to the banks for the calculation of the variable interest rate. The gap between the agreed interest rate and the reference interest rate is called the equivalence gap.
According to BGH case law, these values must be used directly when calculating the new interest rate. The currently reported reference interest rate is taken as the basis and the equivalence gap is added up. This then results in the new interest rate. An increase above this is therefore not permitted and protects the customer in particular from so-called “bait offers” with low interest rates. The borrower can also decide how long this new interest rate should now apply to her. However this, as long as the actual credit is still valid, cannot change also into a completely different, more favorable interest rate. Thus, both the borrower, but also the lender in a certain way limits have been set.
However, this decision can of course be applied not only to the upward adjustment of interest rates, but also in principle to the downward adjustment, i.e. in favor of the borrower; if the reference interest rate has thus fallen in the meantime since the loan was taken out. According to the principle of the BGH, the initial equivalence gap should always be maintained. Interest rate reductions in the reference interest rate would thus also have to be passed on to the bank customer after the fixed interest rate period has expired, but this is probably rarely the case in practice. In this case, there could be a claim for an interest rate adjustment, which would be best checked by a lawyer.
Interest rate adjustment clauses
If a bank’s general terms and conditions also contain so-called “interest rate adjustment clauses” that basically give the bank a free hand in setting the interest rate within the contractual relationship, these are also illegal according to BGH rulings.
If, on the other hand, they contain an adjustment threshold at which a change in the interest rate can be made from a certain change in the reference interest rate, as well as a subsequent review period, they withstand validity according to case law, on the other hand, since the bank precisely cannot act at its own discretion and this can be in the interest of both contracting parties, but does not have to be. It can also be agreed directly that any change in the reference interest rate leads directly to a change in the agreed interest rate. According to the BGH, this is also lawful.
It is worthwhile itself therefore to examine your credit agreement also in detail for possibly ineffective clauses, so attorney Fürstenow. An ineffectiveness of the clause leads first to a pure omission of this from the contractual relationship, i.e. one must renegotiate the interest afterwards, naturally in the context of the conditions already pointed out here.
Both the interest rate adjustment clauses and the pure negotiation or determination of a new interest rate after expiration of the agreed term have in the past often been subject to provisions that are actually inadmissible for the consumer. It is therefore definitely worth taking a closer look at the agreements made and the loan agreement. In particular, the passing on of a lower reference interest rate to customers has probably only rarely been done in practice. In addition, you should always be aware of the legal agreements in the event of an imminent end to the previous fixed interest rate, in order to avoid a subsequent, actually inadmissible, excessively high interest rate. Due to the complexity, but nevertheless great relevance, of the topic, this legal advice can of course only give a small overview of the problem; an individual case examination is therefore essential in any case in order to be able to determine possible claims.
Do you have further questions on this topic or would you like further legal advice? Attorney Sascha C Fürstenow will be happy to do this for you!