The mortgage market suffered a significant slowdown last year, mainly due to the interest increases carried out by Spanish banks. According to the National Institute of Statistics, the registration of mortgages for housing was reduced by almost 18% compared to 2022. However, creditor subrogation, which is a legal formula that allows a mortgage loan to be transferred from one entity to another, did experience growth: 22,343 operations of this type were registered, which represented a year-on-year growth of 6.2%.
But what led 22,343 households to subrogate the mortgage to another financial institution? According to the financial comparator HelpMyCash.com, it is likely that the possibility of saving a good amount of money prompted these mortgage holders to change banks, since with this operation the interest can be lowered and, also, they can go from a variable rate to a fixed one. , which can be convenient when the Euribor rises.
The comparator's analysts affirm that the variable mortgages currently sold by Spanish banks have an interest rate of around Euribor plus 0.70%, although some entities lower their rates below Euribor plus 0.50%. It is a noticeably lower price than what was offered just a few years ago: between 2010 and 2015, for example, the average differential (which is added to the Euribor) was 1.50%, while between 2016 and 2021 it was around 1. %.
Clients who took out a variable rate mortgage during those times can take advantage of subrogation to transfer their mortgage loan to a bank that agrees to reduce its differential. In this way, the amount of your monthly payment will be significantly cheaper and you will be able to save a lot of money in interest each year.
For example, let's say that a person took out a variable mortgage in 2015 with an interest rate of Euribor plus 1.50% and an original term of 30 years. If he has 150,000 euros of outstanding amount left and subrogates the loan to another bank to reduce his differential, this client can save an average of about 1,000 euros per year, HelpMyCash calculates.
The savings that can be obtained, however, will be greater or lesser depending on the current conditions of the mortgage that is going to change banks and those achieved after the transfer. The comparator has created a free subrogation simulator with which you can calculate how the monthly fee would change after carrying out this operation.
But subrogation not only serves to lower the interest: it can also be used to go from a variable rate to a fixed one. This change can be especially convenient in times when the value of the Euribor is high, such as the current one, since the client can get rid of this index and start paying a stable fee that will never again depend on external factors.
Although the fixed rates offered now are not as attractive as those of a few years ago, competitive interests can still be achieved within this modality; especially now that entities have begun to reduce them. According to HelpMyCash, if the client's profile is good, there are banks that can take over their variable mortgage and convert it into a fixed one with an interest rate starting at 2.62%.
It should also be noted that the price of surrogacy is relatively low. The client only has to pay the price of the appraisal of their home, which costs about 300 euros on average, and the subrogation commission that appears in the deed, the cost of which can range between 0% and 2% of the outstanding amount.
Now, if a variable mortgage is going to be subrogated in 2024 to convert it into a fixed one (or mixed with a fixed rate applied for at least three years), the bank cannot charge the subrogation commission that appears in the deed. Starting in 2025, the commission that may be applied for this operation will be a maximum of 0.05% of the outstanding amount, even if a different price appears in the deed, and it will only have to be paid if the mortgage loan is three years old or less. of validity.
Of course, creditor subrogation is not the only operation that allows modifying the conditions of a mortgage. According to HelpMyCash, the clauses of a mortgage deed can be changed through a novation, which is an agreement between the bank itself and the client, or by taking out a new mortgage loan to cancel the current one.
The comparator encourages interested parties to explore the three options: to request a novation from the bank itself and to request subrogation offers or new mortgages from other entities. In this way, you can compare the conditions and prices of each operation and assess which of them would be the most convenient.
