Re-mortgages in Spain are very different to the UK.
We have been arranging re mortgages in Spain for many years. We understand and will explain the pitfalls of moving your mortgage before it has cost you lots of time and money. For your free consultation contact us today.

There are two ways of moving your mortgage.

Subrogation
One is to subrogate or transfer existing loan to a new lender. Not all lenders will subrogate but if they do you will have to meet and follow the laid down procedure as per the government legislation of 2006. Subrogation has the benefit of reducing significantly the cost of moving by avoiding mortgage deed tax a cost that is applicable on all new loans in Spain and equates to 1.8% of lending. Any extra cash taken will attract all normal costs.
To avoid this tax the new lender must offer improved interest rate or an extended term and then via the notary your existing bank must be given 20 days to match the new terms or release you. Movement of the loan to interest only, extra cash out or any other features being provided do not constitute reasons for subrogation being allowed and therefore the mortgage deed tax saving. Your existing bank can match interest rate but refuse to meet any other features to force the subrogation process to be stopped. Whilst you save on mortgage deed tax all other normal costs of a mortgage would apply. These will include a valuation fee, a bank arrangement fee and notary and land registry costs. These will total around 2% of your loan amount and will have to be covered by you or added to loan if loan to values allow.

New mortgage
The second means of re-mortgaging is straight forward closure of one loan and instigation of a new one. In this instance you have no government process to follow and are free to leave your existing lender at will but all costs of moving the mortgage including mortgage deed tax will apply. In total these costs will be around 3% to 4% of lending and include all the costs above, the mortgage deed tax and possibly an early repayment charge from your existing bank.
Lifetime mortgages for over 60's can be used to replace existing mortgage and prevent monthly payments having to be made.

Costs
There are couple of banks that will either assist with costs of moving loan or in one instance fully cover costs of subrogation.

Please be aware of any brokers that do not explain the costs associated with re-mortgages. You can spend a lot of time and trouble only to find out at the last minute that costs area payable.