This judgment concerns the interpretation of EU consumer protection law regarding unfair terms in mortgage loan agreements, specifically related to variable interest rates based on reference indices.The essence of the judgment is that it sets standards for transparency and fairness of mortgage loan terms that use official reference indices for calculating variable interest rates. The Court ruled on when such terms can be considered transparent and fair, and what consequences follow if they are found unfair.The main provisions of the judgment include:
- Requirements for transparency of loan terms using reference indices – lenders must ensure consumers can understand how the rate is calculated and its economic impact
- Standards for assessing unfairness of such terms – must consider all circumstances including transparency failures and market comparisons
- Rules on consequences if terms are found unfair – courts can substitute statutory provisions but cannot revise unfair terms
- Limitations on lenders’ rights to interest if loan agreement is voided due to unfair terms
The most important provisions for practical application are:
- Lenders must provide complete information about reference indices and warnings about their features, not just rely on official publications
- Using an official index does not automatically make a term fair – courts must assess actual impact on consumers
- If terms are unfair, lenders cannot claim statutory interest from date loan was issued
- Courts cannot modify unfair terms but can substitute statutory provisions in some cases
