Between 2,500 and 3,000 euros more per year. This is the extra cost that those with variable-rate mortgages whose interest rates have been revised in recent months have had to pay, on average. The cause? The rapid rise of the Euribor, whose value has skyrocketed above 4% (its price was negative a year and a half ago) due to the successive rate increases carried out by the European Central Bank to contain the high inflation in the euro area.
Faced with this increase in cost, there are many who wonder if they can change their variable mortgage to a fixed rate so as not to suffer from the rises in the Euribor. According to the financial comparator HelpMyCash.com, it can be difficult to achieve this, because banks are interested in keeping their mortgages tied to the Euribor, but not impossible: if the client plays their cards well, they can switch to a fixed interest rate of around 3%. and pay a stable and affordable fee.
The comparator analysts affirm that this change can be achieved in three ways: through an agreement with the bank with which the mortgage is held (novation), with a transfer of the loan to another entity (creditor subrogation) or through the contracting of a new fixed mortgage with which the outstanding mortgage debt will be settled at a variable rate.
To increase the chances of moving from the variable mortgage to the fixed rate, HelpMyCash advises exploring the three formulas in parallel. They recommend that the client request the change from their own bank and, at the same time, contact other entities to request subrogation offers or a new mortgage loan with a fixed interest. In this way, if one or more finance companies reject the mortgagee's claims, the mortgagee may have a plan B.
In addition, if the client obtains the approval of one or more entities, they will be able to present their offers to other banks to request counteroffers that equal or improve their conditions. Haggling with various financial institutions will increase your options of obtaining a lower fixed interest and, consequently, paying a more affordable fee when the modification is formalized.
It should be borne in mind, however, that the three operations mentioned have a cost. In the case of novation and subrogation, the mortgaged person must pay the appraisal of their home (if requested), which costs an average of 300 euros. And in the contracting of a new fixed mortgage, you will have to pay the appraisal price and the expenses associated with the registration cancellation of the current variable rate loan, whose average cost is about 1,000 euros.
For this change, however, there are no commissions to pay. According to Royal Decree-Law 19/2022, launched by the Government of Spain in November of last year, banks cannot charge commissions for creditor novation or subrogation if either of these two operations is carried out to transfer a variable mortgage to the fixed rate. In addition, they cannot apply any commission for early amortization if a variable rate mortgage loan is partially or totally paid off early, either to replace it with a fixed rate or for any other reason. Both bans will remain in force throughout 2023.
Although changing a variable mortgage to a fixed rate is still viable, there is a possibility that the client cannot carry out this modification, either because they cannot find entities that accept their request or because they do not find any that offer a competitive fixed interest rate. . In this case, there is an alternative that allows you to pay stable and manageable installments for a certain time: change to a mixed type through a novation, a subrogation or a new contract.
If a variable mortgage is transferred to the mixed rate, the client will be able to enjoy a fixed interest rate for the next five, ten or 15 years, depending on what the bank offers. And in most cases, in addition, you will pay a lower fee than if you switched to the fixed rate, since the initial interest on mixed mortgages is usually lower than that of fixed ones. However, it must be taken into account that the protection against the Euribor will not be eternal, since the interest will become variable when the period of application of the fixed rate ends.
