European UnionMy bank didn't explain the currency risk of my foreign-currency mortgage. Were they obliged to?
Yes, your bank was obliged to explain the currency risk of your foreign-currency mortgage under EU law, including clear, prominent warnings before you signed the contract.
What the Law Says
EU law imposes strict pre-contractual information duties on lenders offering foreign-currency mortgages. Two key directives require clear, comprehensible, and timely disclosure of exchange rate risks.
Under Directive 2008/48/EC on credit agreements for consumers, lenders must provide standardised pre-contractual information — including all costs and risks — before the consumer is bound. This includes explaining how exchange rate fluctuations could increase repayment amounts.
Directive 93/13/EEC on unfair terms in consumer contracts applies directly: a term that has not been individually negotiated and causes a significant imbalance in parties’ rights is unfair — especially if the consumer wasn’t properly informed about currency risk.
The European Court of Justice (ECJ) has confirmed that failure to disclose currency risk may render the entire loan term unfair and therefore non-binding on the consumer.
Statutory TextThe creditor shall provide the consumer with the standard form ‘European Standardised Information Sheet’ (ESIS) before the consumer is bound by any credit agreement.
— Directive 2008/48/EC, Art. 5(1)
Statutory TextA contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations.
— Council Directive 93/13/EEC, Art. 3(1)
What Courts Have Said
The Court of Justice of the European Union (CJEU) has ruled repeatedly that inadequate disclosure of foreign-exchange risk violates both transparency and fairness requirements under EU consumer law.
The CJEU held that a foreign-currency loan term is unfair if the consumer was not given clear, intelligible and timely information about exchange rate risk — especially where repayments become unpredictable and disproportionately burdensome.
The Court reaffirmed that national courts must assess whether foreign-currency clauses were transparent *and* fair — and that lack of pre-contractual explanation of currency risk undermines both.
What to Do
Gather your loan agreement, pre-contractual documents (e.g., ESIS), and any correspondence showing no currency-risk warning was given.
Contact your national financial ombudsman or consumer protection authority — e.g., in Germany: BaFin; in Spain: Banco de España; in France: ACPR.
Ask your national court to assess whether the currency clause is unfair under Directive 93/13/EEC — many EU countries allow partial or full annulment of such terms.
If your case involves Hungary, Poland, or Romania, courts have already annulled thousands of FX mortgages due to deficient disclosures.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.