How improve the conditions of your mortgage


The mortgage subrogation is an option that allows moving the debt of a bank to another for improve the loan conditions maintaining the initial term conditions and repayment. Additionally is talked of subrogation when the debt is moved a payer to another in the purchase and sale agreement of a property with mortgage.

The subrogation results especially interesting in loans with a major fee-paying pending capital and a long period of repayment, and it usually does in the first few years of loan life of a property (the majority of the companies demand that they have happened 3 years to manage the change).


How takes place the process of subrogation?


  • Without requesting permission. It does not be necessary request permission to the current company to change to another that offers pay a lower monthly fee in the mortgage.
  • In looks for of the best conditions. It is necessary to analyse in detail the conditions of all possible mortgages before settling on one. Is advisable to do an estimate of the monthly fee to pay in each case to know if compensates the change.
  • Application and acceptance terms. After selecting the company to that which is wanted move the mortgage, it is necessary to present an application of subrogation. If the bank accepts it, will have a term of 7 days to offer them conditions of the new loan (the binding tender). Then, a further period is opened of 10 days to accept the offer and start to save in the monthly fee.
  • Possible counteroffer. In this phase of the process, the bank in which the mortgage was signed would be able to present one offer of novación that levels or improves the conditions of the new bank. If that counteroffer, the client is produced will not be able to abandon the company in which signed the mortgage and there ends the attempt of subrogation.


What expenses has change the mortgage of bank?


  • Early repayment fee of the current loan, that it usually is of 1%.
  • Fee of subrogation, that is paid to the new bank and that includes expenses as the Tax Stamp Duty (IAJD) and notarial tariffs and register them, that it usually is of 0.5%. The IAJD just is paid in the event of extension of the amount of the mortgage. The amount varies according to the autonomous community.
  • Valuation of the property, that it can cost around 300 euros.
  • Expenses of management, notary's office, land registry, etc., derived from the procedure of the process.
The all-in cost of changing the mortgage of bank can suponerentre 2,000 and 3,000 euros of average, although the final figure it will depend on the capital that is subrogated, the cost of the property that of the autonomous community in which is located.


The subrogation will be appropriate provided that those costs are offset with the saving that is going to generate the relocation of mortgage. A discount of 50 euros in the monthly fee would suppose 600 annual saving euros, and 12,000 euros in 20 years. It is just necessary to do calculations before taking a decision.



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Mortgage subrogation infographic


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