IRPH vs Euribor: Why IRPH Mortgages Are More Expensive in Spain

Many mortgage borrowers in Spain discovered years later that their loan was linked to IRPH instead of Euribor.

Understanding the difference between these two indexes is essential because IRPH mortgages have historically been much more expensive than Euribor-based mortgages.

In many cases, borrowers paid thousands of euros more in interest simply because their mortgage used IRPH.

What Is Euribor?

Euribor (Euro Interbank Offered Rate) is the benchmark interest rate used for most mortgages in Spain.

It represents the average interest rate at which European banks lend money to each other.

Because it reflects real interbank market conditions, Euribor tends to move closely with monetary policy decisions from the European Central Bank.

For this reason, Euribor mortgages usually offer lower interest rates compared with IRPH mortgages.

What Is IRPH?

IRPH (Índice de Referencia de Préstamos Hipotecarios) is another interest rate index used by Spanish banks.

Instead of reflecting interbank lending rates, IRPH is calculated using the average interest rates applied by Spanish banks to mortgage loans.

This methodology creates a structural difference between the two indexes.

While Euribor follows financial market conditions, IRPH is influenced by the rates banks themselves apply to customers.

Why IRPH Is Usually Higher Than Euribor

Historically, IRPH has been consistently higher than Euribor.

There are several reasons for this difference:

• IRPH includes bank commissions and costs in its calculation
• the methodology uses averaged mortgage rates rather than market lending rates
• the index tends to react more slowly to market changes

As a result, borrowers with IRPH mortgages often paid significantly more interest over the life of the loan.

Real Example: IRPH vs Euribor Mortgage Cost

Consider a typical mortgage of €150,000 over 25 years.

If the loan is linked to Euribor, the interest rate normally follows market fluctuations and tends to remain lower.

If the same loan is linked to IRPH, the interest rate can remain consistently higher.

Over the life of the mortgage, this difference may represent tens of thousands of euros in additional interest payments.

The difference between IRPH and Euribor has been one of the key issues analysed by European courts.

You can read more about the legal context in the CJEU ruling on IRPH mortgages.

IRPH vs Euribor — key difference

Euribor reflects the interest rates at which European banks lend money to each other.

IRPH is calculated from the average interest rates applied by banks to mortgage loans offered to consumers.

This difference in calculation methods has often resulted in IRPH mortgages having higher interest costs than Euribor-linked mortgages.

Why the European Court Reviewed IRPH

Because many borrowers claimed they were not properly informed about how IRPH works, the issue reached the Court of Justice of the European Union.

The court examined whether banks provided sufficient information about:

• how IRPH is calculated
• how it compares with Euribor
• the financial impact of choosing this index

You can read more about the European legal analysis in our guide to the IRPH CJEU ruling in Spain.

Can IRPH Mortgages Be Challenged?

Yes.

If a borrower was not properly informed about the differences between IRPH and Euribor, the clause may be considered abusive under European consumer protection law.

Spanish courts now examine whether the bank fulfilled its transparency obligations before the mortgage was signed.

If transparency requirements were not met, the IRPH clause may be invalidated.

How to Check If Your Mortgage Uses IRPH

You can identify the index used in your mortgage by reviewing the mortgage deed.

Look for references such as:

• IRPH Entidades
• IRPH Cajas
• IRPH Bancos

If one of these appears in the contract, your mortgage interest may have been calculated using IRPH.

If you want to understand how courts analyse these clauses, you can also read our guide on the EU ruling on IRPH mortgages in Spain.

If you are unsure which index your mortgage uses, you can check the interest-rate clause in your mortgage deed.

This guide explains exactly how to verify it:

• How to check if your mortgage uses IRPH

Frequently Asked Questions

Is IRPH always higher than Euribor?

In most historical periods IRPH has been higher than Euribor, although the exact difference varies depending on market conditions.

Why did banks offer IRPH mortgages?

Banks argued that IRPH was more stable than Euribor because it did not fluctuate as quickly with market changes.

Can IRPH mortgages be cancelled?

Not automatically. Courts must analyse each case individually to determine whether the IRPH clause was transparent.

How much money can be recovered from IRPH claims?

The amount depends on the mortgage value and duration, but in some cases borrowers have recovered substantial sums due to higher interest payments.