Contrary to what many people think, paying the last installment of the mortgage does not end the life of the credit. Or at least, not entirely. The debt is officially settled, but the charge registered in the Land Registry remains on the house. And if the owner wants to eliminate it, for example, to sell the property later, he must carry out a procedure called cancellation or registration.
To complete this process, it is necessary to pay the fees of the professionals who will be involved in lifting the mortgage charge, such as the notary or the registrar. However, as reported by the financial comparator HelpMyCash.com, there are some expenses associated with the cancellation of registration that should never be charged to the client and that, in some cases, are irregularly included in the invoice when the management is entrusted to the bank with the that the debt was owed.
The first of these is the commission associated with the issuance of the zero debt certificate; a document that certifies that the owner of the house has fully settled the outstanding amount of his mortgage and that must be presented to the notary so that he can prepare the deed of registration cancellation. In the Bank of Spain's 2021 Complaints Report, the supervisor makes it clear that "the entity will be obliged to issue the bank documentation that proves the payment of the loan without charging any commission for it", therefore it is totally prohibited to demand any compensation for delivery of this certification.
Furthermore, the bank with which the canceled mortgage was contracted cannot charge any type of surcharge for sending a representative to the notary to sign the aforementioned cancellation deed. In the same 2021 Claims Report of the Bank of Spain, it is made abundantly clear: "your appearance at a notary […] constitutes nothing more than the provision of the mortgagee's consent to the lifting of the mortgage [...], which is why such procedures cannot be are likely to be remunerated by means of a commission”.
There is also another expense that cannot be charged to the owner: the one associated with the change of creditor when a bank merger has occurred. When a bank absorbs another, it generally does not go to the Property Registry to indicate that it has become the new creditor of the mortgages that the absorbed entity had in force. However, when the Registry is ordered to lift a mortgage charge on a house that is in the name of the purchased bank, it registers the change of creditor and, sometimes, issues the invoice in the name of the owner at the express request of the bank.
This practice, according to the Bank of Spain, is not legal either, since it is the absorbing bank that is obliged to pay the registry expenses associated with the merger. According to HelpMyCash, if the owner is charged for this item or any of the above, he can refuse to pay them. Likewise, if he has already paid them, he can file a claim with his bank and with the Land Registry (in the case of merger expenses) to demand the return of the money.
And what expenses must the old mortgagee pay when he wants to cancel his mortgage? There are two costs that are mandatory: the fees of the notary who prepares the deed of cancellation and those of the registrar who eliminates the mortgage charge on the home. On average, according to HelpMyCash, the joint invoice for these items costs about 600 euros, although this amount may be higher or lower depending on the original capital of the mortgage to be raised.
The owner can also hire the services of an agency to take care of the process, whether it is a proposal by the bank or an independent one. In the first case, the agency fees usually exceed 300 or even 500 euros, so it is not the cheapest option. On the other hand, if the registration cancellation is ordered from an independent agency, the invoice is usually considerably lower.
HelpMyCash, for example, collaborates with an independent agency that charges around 182 euros for its services. From the comparator they make available to users a free registration cancellation expenses simulator that allows them to find out how much the entire procedure would cost if the notary and registrar fees are added to the total invoice.
Hiring an agency, yes, it is not mandatory. If desired, the owner can cancel the mortgage on his behalf. To do this, you must request the zero debt certificate from the bank, present it to the notary to prepare the deed of cancellation, deliver and seal before the Treasury the model 600 of the tax on documented legal acts (exempt from payment) and go to the Property Registry to request the lifting of the mortgage charge.