2023-12-31 13:03:59
Mortgage loans are almost essential for people to become owners of that dream home, and three out of four buyers need a mortgage to be able to finance the purchase and sale of their home.
Therefore, although mortgages accompany owners for much of their lives, their conditions may vary. More than 70% of the mortgages in force in Spain are governed by a variable interest rate, which have been facing a historic increase in prices for some time as a result of a high Euribor – an indicator to which the majority of loans for the purchase of properties are referenced. housing at a variable rate in Spain – which has caused many homeowners to consider changing their mortgage.
Mortgage subrogation is a procedure that consists of modifying the initial conditions under which said mortgage was signed, so the mortgage is changed from one bank to another in which aspects such as commissions or interest rates can be negotiated. The commission for making this change is 2% of the amortized capital in the first ten years of the life of the loan, although if it exceeds this amount, the penalty is 1.5% of the amortized capital.
However, during 2023, the Government implemented the Code of Good Practices, eliminating commissions for subrogation from variable to fixed or mixed mortgages. According to the latest data from the Bank of Spain, applications to benefit from this Code of Good Practices amounted, until September 2023, to more than 55,000.
This measure will be extended to 2024, so the change from variable to fixed or mixed rate mortgage will continue to be free, preventing homeowners from having to pay up to 5,000 euros for mortgage subrogation of an average mortgage of 300,000 euros. Therefore, if the variable mortgage is changed to a fixed rate mortgage through subrogation, no commission will have to be paid and only the appraisal will have to be paid, the price of which ranges between 200 and 400 euros.
“In this way, all mortgage holders in our country who request it will be able to change their current mortgage loan to another with a lower interest rate until December 2024, thanks to the cancellation of subrogation commissions that clients can find detailed in their mortgage contracts,” explains financial advisor iAhorro.
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