There are several reasons why you might be thinking of changing your mortgage in Spain. Perhaps you’re looking for better mortgage conditions. Maybe you’d like a new mortgage contract with no abusive clauses. Or you want to change the names of the mortgage holders. All three are valid reasons and all involve a process and certain costs.
In this guide, we look at how to change your mortgage in Spain, the costs it involves and whether it’s always possible.
Did you know? Transferring your mortgage in Spain from one bank to another is known as subrogación de acreedor in Spanish.
The advantages of changing your mortgage in Spain
The benefits of modifying your mortgage, whether it’s the contract itself, the lender or the holders, include the following:
- The chance to access a better mortgage rate – you may have a fixed-interest rate and want to tap into a lower variable rate. Or your loan might be with variable interest and you’d prefer the certainty of a fixed monthly payment.
- The opportunity to change the length of your mortgage – your financial circumstances may have changed (for better or worse) and it could be to your advantage to shorten or lengthen the number of years left to repay your mortgage.
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- The chance to get rid of abusive clauses in your contract – in the recent past, Spanish banks were notorious for including terms and conditions in mortgage contracts that clearly went against consumer interests. These are known as ‘abusive clauses’ and you might welcome the opportunity to take on a mortgage contract without them.
- A way of changing the mortgage holders – your personal circumstances may be different now than when you took out the mortgage. For example, you may have separated from your co-mortgage holder. Changing your mortgage in Spain could, therefore, be beneficial to you both.
Did you know? Before you sign any new mortgage contract you should ensure you understand all the small print and all the implications of the terms and conditions. If you need help with this, get in touch with our expert team.
How to change your mortage in Spain
The process for modifying a mortgage contract depends on what you want to do, as follows.
If you’re looking to improve your mortgage terms and conditions, you need to do the following:
- Shop around to find a bank that offers the new mortgage you’re looking for.
- Get pre-approval for the new mortgage from your chosen bank.
- Your current bank then has seven days to equal or improve the conditions offered by the new mortgage. The bank must present these to you by notary. If your bank does this, you are obliged by law to accept the same or improved conditions and cannot change your loan.
- If your current bank opts not to equal or improve the new mortgage loan, you accept the new offer, sign the new contract at the notary and pay corresponding costs.
Got a question about Spanish mortgages? Here are all the answers.
Changing loan holder
If you want to change the names of the holders of the mortgage, the process is as follows:
- Make an appointment with your bank and explain what you want to do.
- The bank then decides whether to allow the change in holder.
Note that the bank is not obliged to modify the names of the holders of the mortgage and has the right to refuse to do so. If this is the case, your only option is to cancel the mortgage and take out a new one with your current bank or another one.
The costs involved in changing a mortgage in Spain
As you might expect, banks do not change mortgages free of charge and you’ll be liable for several costs. For example:
- Commission for transferring a mortgage to another bank or changing the holder’s name. This amount is usually a percentage, say 0.5% of the outstanding capital and is clearly stated in your mortgage contract.
- Valuation costs. Unless your current bank has equalled or improved your current mortgage conditions, you will be liable for valuation costs when you change your loan.
- Deed costs. If you transfer your mortgage to another bank, you will have to pay for a copy of the new title deeds.
In total, budget for between €1,000 and €1,500 in costs.
Take expert advice
Before you make any decisions on a new mortgage contract, take professional advice on your rights as a consumer. At Costaluz Lawyers, we’ve been successfully defending foreigners’ interests against Spanish banks for over 15 years. Get in touch to find out how we can defend yours.