Investment approach
Mortgage subrogación: how to move to another bank and what it costs
Moving a mortgage to another bank follows the 1994 law: the new bank's offer, the old bank's certificate within 7 days, 15 days for a counteroffer. Deadlines, fees and a worked saving calculation.
Subrogación (substitution of the lender) is the transfer of an existing mortgage to another bank without the old bank's consent: the new bank pays off the debt and the borrower goes on paying it on the new terms. Under Ley 2/1994 on the subrogation and modification of mortgage loans, the old bank issues a debt certificate within 7 days and can keep the client only if, within 15 days, it agrees a change of the loan terms with the client (art. 2 of Ley 2/1994). The move pays off when the saving on payments exceeds the costs.
How subrogación works under the law
The procedure is set out in one article of the law, and each step has a deadline.
- The new bank gives the borrower a binding offer with the loan terms and a document on the costs of the move, including the old bank's maximum fee.
- The borrower accepts the offer, and the new bank notifies the old one.
- Within 7 calendar days the old bank issues a certificate of the amount of the debt.
- After issuing the certificate, the old bank has 15 calendar days to agree with the borrower a novación (novation), that is, a change to the terms of the existing loan.
- If no novación has been agreed, the new bank pays off the debt and states the payment in the escritura (notarial deed). The old bank has no right to refuse the payment.
The key detail of step 4: the bank can keep the client only through a novación that the borrower signs. The borrower compares the old bank's counteroffer with the new bank's offer and decides alone.
What the move costs
The costs of subrogación are lower than for a new mortgage from scratch, and the law caps them.
| Item | What is set | Rule |
|---|---|---|
| Allocation of costs | By the same rules as for a new mortgage | art. 2 Ley 2/1994, art. 14.1.e Ley 5/2019 |
| Notary fee | As for a document with no stated amount | art. 8 Ley 2/1994 |
| Registry fee | With a 90% discount on the base of the outstanding debt | art. 8 Ley 2/1994 |
| Fee on moving from a variable to a fixed rate | No more than the bank's financial loss and no more than 0.05% of the capital repaid in the first 3 years, zero after 3 years | art. 23.6 Ley 5/2019 |
| Fee on a variable rate in other cases | Up to 0.15% in the first 5 years or up to 0.25% in the first 3 years, if it is in the contract | art. 23.5 Ley 5/2019 |
For loans granted before Ley 5/2019 reguladora de los contratos de crédito inmobiliario (the Real Estate Credit Contracts Act), the earlier rules may apply, including the 1% fee limit on subrogación of a variable-rate loan (art. 3 Ley 2/1994). Which regime applies to a specific contract is checked by its date and text. More on early-repayment fees is in the article on early repayment.
When the move pays off: a worked example
Payback is calculated from the difference in payments over the remaining term, less the cost of the move.
Worked example, not a forecast. Outstanding debt 250,000 €, 20 years to the end. The current rate is variable: September 2026 Euríbor of 3.247% (Banco de España) plus a spread of 0.80%, 4.047% in total. The new bank offers, say, a fixed 3.2%.
| Scenario | Rate | Monthly payment |
|---|---|---|
| Stay, rate at the current index | 4.047% | about 1,521 € |
| Move to fixed | 3.2% | about 1,412 € |
| Difference | about 109 € a month, about 1,314 € a year |
If the contract is less than three years old, the old bank's fee on such a move is no more than 0.05% of 250,000 €, that is, up to 125 €. The main caveat: the variable rate will change at the next review, and the comparison holds only at today's index. How the index gets into the payment is covered in the article on Euríbor. Your own figures can be run in the calculator.
Subrogación or a new mortgage with early repayment
There is a second route: repay the loan early and take a new mortgage at another bank. It is more flexible, because the new contract does not repeat the old one, but more expensive: the usual early-repayment fees apply, and arranging a new mortgage and cancelling the old one costs more than a transfer.
A separate case in a purchase: subrogación into the seller's mortgage, when the buyer becomes the new debtor on an existing loan. This is the bank's decision, not the buyer's right: the bank assesses solvency afresh under the rules of art. 11 of Ley 5/2019 and may refuse. What types of interest rate exist is covered in the article on types of mortgage.
What to compare before starting the procedure
The whole formula is compared, not the rate on the first page of the offer:
- the index and spread, or the fixed rate and its term;
- rate discounts for salary, insurance and cards, and what these products cost over a year;
- the new bank's fees for early repayment and for changing terms;
- insurance requirements and whether you can bring your own policy;
- the remaining term: the shorter it is, the smaller the final saving.
These questions are best put to an intermediary who compares several banks at once; a list of questions is in the article on questions for a mortgage broker.
When subrogación does not suit
A transfer does not work if few years remain until the end of the loan: the saving over a short term may not cover the costs and the time. It also does not suit when the borrower's solvency has worsened: the new bank assesses it afresh and may refuse.
More care is needed with an offer where the low rate depends on a bundle of products: if you give up the insurance or the card, the spread rises and the advantage disappears. In such cases it is more honest to compare the total cost of the loan rather than the nominal rate.
Questions and answers
What is mortgage subrogación in plain words?
It is the transfer of an existing mortgage to another bank: the new bank pays off the debt to the old one, and the borrower goes on paying the new bank on the new terms. Under Ley 2/1994 the old bank's consent is not required.
Can the old bank block the move?
It can offer its own terms and, within 15 calendar days after issuing the debt certificate, agree a change to the loan with the borrower. Without the borrower's signature that is impossible, and the bank has no right to refuse the payment.
What fee applies on moving from a variable to a fixed rate?
Under art. 23.6 of Ley 5/2019, no more than the bank's financial loss and no more than 0.05% of the capital repaid in the first three years of the contract. After three years there is no fee.
How much do the notary and the registry cost in a subrogación?
The notary fee is calculated as for a document with no stated amount, and the registry fee with a 90% discount on the base of the outstanding debt, under art. 8 of Ley 2/1994.
Can you take over the seller's mortgage when buying a flat?
Only with the consent of the bank, which will reassess the buyer's solvency. It is a separate decision by the bank, and it is worth obtaining before signing the arras (reservation deposit contract).
