FOREIGN CURRENCY MORTGAGE

The Legislative Decree 21 April 2016 n.72 in the Consolidated Banking Act has the following article:
Art. 120-quaterdecies (loans repayable in a foreign currency).

1. If the credit is denominated in a foreign currency (different to that in which the client will through earnings or profits reimburse the loan, or a currency which is not the legal tender currency in force in the EU Country where the client has their residency at the signature of the contract) the client has the right to exchange the currency with which the deed is denominated in the following cases and in the following modalities:

• The currency with which the main part of the client’s income or profits for the reimbursement is denominated, as specified in the latest creditworthiness assessment relating to the credit contract.
• The legal tender currency in force in the EU Country where the client had their residency at the moment of the signature of the contract or at the moment of the exchange request.

2. The CICR, following the indication of the Banca d’Italia, may lay down the conditions for the right to conversion with particular regard to:

• The minimum exchange rate variation used at the moment of the signature of the contract, which should not be higher than the sum specified in the comma 4.
• The all-inclusive fee due to the financier according to the contractual agreement.

3. The exchange rate used for the exchange is equivalent with the exchange rate measured by the Central European Bank on the day of the exchange rate request, if not specified otherwise in the contract.

4. If the exchange rate between the client’s currency and Euro exceeds 20% (compared to the exchange rate at the moment of the signature of the contract), the client, informed by the bank, is entitled to request the mortgage in their currency. This way, the client will not face the exchange risk any more.