Changing the mortgage from one bank to another: How much does it cost?

2023-10-21 08:45:26

Here we will tell you how to change the mortgage from one bank to another and how much money it will cost you. Continue reading the article to find out.

Change the mortgage from one bank to another

exist two different ways changing the mortgage from one bank to another. Each of them has advantages and costs derivedamong them are the home appraisal expense and possible commissions from banking entities.

Today, the mortgage market is not going through its best moment. The rise in interest rates is causing mortgage loans to increase significantly. To protect themselves from this situation, a large number of people thought about changing their mortgage from one bank to another. In this way, it would be possible obtain more advantageous conditions and that the mortgage payment implies a lesser burden on the family economy.

The different ways to change the bank mortgage

Regarding the change of mortgage, we must be clear that There are different ways to do it. Here we will detail what they are:

Creditor subrogation: consists in transfer your mortgage from one bank to another. This is an operation that will give you the possibility of reducing the interest rate and changing it from variable to fixed rate or vice versa. On the other hand, it is also possible modify return terms and eliminate bonuses and commissions. Cancel the current mortgage and take out a new one: consists of signing a new mortgage loan with another bank and cancel the current one, in exchange of new conditions that are more advantageous. When taking out a new mortgage you will have the possibility of agreeing to new conditions, that is, You will be able to review the terms, capital, interest, among others.

How much does it cost to transfer the mortgage loan?

Both the cancellation and contracting of a new mortgage, as well as the subrogation of a creditor, involve expenses. We will detail you how much money you should allocate to each of them.

Creditor subrogation expenses

If it is a subrogation of a creditor, you must bear in mind that you will have to face the following expenses:

Home appraisal price: The average of a home appraisal is located close to 300 Commission: you may have to pay a subrogation fee imposed by the current banking entity. This is between 0% and 2% of the outstanding amountwill vary depending on what you have signed in the deed.

Cancel current mortgage and take out a new one

If what you want is to take out a new mortgage loan, you must assume the following expenses:

Home appraisal: Just as in creditor subrogation, you must assume the price of the appraisal that around 300 euros on average. Commission for opening the new mortgage: You will have to assume this expense if there is such a commission, however, It is currently rare. Cancellation fees: it is about the Expenses derived from the cancellation of the current mortgageapproximately, they are around 1000 euros on average. Early repayment fee: it is possible that there is a commission imposed by the current bank. The cost is around between 0% and 2% of the outstanding amountaccording to what has been signed in the deed.

Subrogation for exchange to fixed rate

Faced with the rise in the Euribor, many opted to subrogate the mortgage to go from a variable rate to a fixed one. Regarding this, it is essential to make clear that, when going from variable to fixed rate, The commission that the current bank may charge will be a maximum of 0.05%. Besides, It can only be applied when the change takes place during the first three years of the term. After three years, the commission will be 0%.

The main advantages of changing the bank mortgage

If you are not happy with the conditions of your mortgage loan, there is no point in maintaining it. If your bank granted you a more expensive mortgage than those currently offered and refuses to improve it, The best thing to do is go to another entity that offers you conditions that better suit you.

Changing your bank mortgage will give you the possibility of enjoying a large number of advantages. We will tell you which are the most important improvements you can obtain:

Lower fees

You will have the possibility of pay a lower fee. For this, you must find a banking entity that is willing to reduce the interest on your current mortgage.

Change from variable to fixed rate

As we know, the Euribor has risen without restIt could even continue to increase in the future. If you have a variable rate mortgage loan, It may still be a good time to switch to the fixed rate. Some banking entities still They offer fixed interest rates below 3%.

Find a more flexible banking institution

Your bank has probably refused to modify your conditions to, for example, eliminate owners, eliminate IRPH, increase capital, among others. If this is your case, the ideal is make the decision to go to another bank that does accept to make these types of changes.

What are the requirements to change the bank mortgage?

For another banking entity to assume your mortgage or approve the application of the one you want to contract, It is essential to have a good profile and have been paying the fees for a year or, in some cases, up to three. The latter is because the new entity needs have guarantees that you comply with the payment of your monthly payments without problems.

Does my current bank have to give its consent to change the mortgage?

The answer is no, it will not be necessary to have the consent of your current bank to transfer the mortgage to another banking entity. It will be enough to request the change to the new entity.

After reading this article, we are very interested in knowing what your opinion is about changing the mortgage from one bank to another. If you are interested in sharing it with us, you can do so in the “Comments” section of our Blog.

If you find yourself in a situation that you cannot resolve on your own, do not hesitate to turn to Oi Real Estate. A team of professionals will be at your disposal and will help you throughout the process. We are waiting for you!

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