FOREIGN CURRENCY MORTGAGE
The Legislative Decree 21 April 2016 n. 72 introduces in our Testo Unico Bancario the following article.
Art. 120-quaterdecies (Loans financed in foreign currency).
1. If the credit is denominated in a foreign currency (a currency other from the one with which the client earns his salary or with deals his activity aimed at the reimbursement of the loan or a currency other from the legal tender currency in the EU Country where the client has his residence at the signature of the contract) the client has the right to exchange the currency with which his deed is denominated in the following cases and in the following modalities:
• The currency with which the main part of his incomes or the dealing of his activities aimed at the reimbursement is denominated, as specified in the latest creditworthiness assessment related to the credit contract.
• The legal tender currency in the EU Country where the client had his residence at the moment of the signature of the contract or at the moment of the exchange request.
2. The CICR can establish the conditions related to the exchange right on the ”Banca d’Italia” purpose, especially for:
• The minimum exchange rate variation used at the moment of the signature of the contract, which has not to be higher than the sum specified in the comma 4.
• The eventual all-inclusion fee due to the financier according to the contract agreement.
3. The rate exchange used for the exchange is equivalent with the rate exchange measured by the Central European Bank the day when the exchange request was required, if not differently specified in the contract.
4. If the exchange rate between the client’s currency and Euro exceeds of 20% (compared to the exchange rate in charge at the moment of the signature of the contract), the client, informed by the bank, is entitled to ask to turn his outstanding mortgage into his own currency. This way, the client will not face the exchange risk anymore.