The European Banking Authority (EBA) has published a Decision specifying the formula to be used by creditors when calculating the benchmark rate under the Mortgage Credit Directive (MCD). The Decision will be translated into the official EU languages and published on the EBA’s website, and in the Official Journal of the EU.

The formula developed by the EBA includes an underlying rate that is specific to each Member State, namely the European Central Bank rate for Eurozone countries and the national central bank rate for non-Eurozone countries. As a result, the formula will create an EBA benchmark rate that is bespoke to each Member State, and remains up to date over time. But to ensure that consumers receive the most appropriate example, the EBA rate only applies where no national rate has been set.

View EBA publishes Decision specifying the benchmark rate under the MCD, 21 March 2016