Currently, many banks give us the option of subrogating our mortgage to take it away and improve its conditions. This operation can come in very handy to lower what we pay monthly for our loan, but it is not available to everyone. In this article, we will see what basic requirements must be met for an entity to accept our debt and we will explain in detail how this transfer is carried out and how much money it costs.
To change your bank loan is necessary…
Logically, no bank will want us to take our mortgage loan if we are not solvent. Therefore, to prove it, it will be necessary to meet these requirements in the vast majority of cases:
- Carry a minimum of two years paying the quotas. Practically no bank will offer us a subrogation if we do not meet this condition.
- That the pending amount does not exceed 80% of the value of the home. The risk of non-payment skyrockets when the financing exceeds that percentage.
- Enjoy a good economic situation. To obtain approval, it is essential to earn a good salary, have few debts, and have a stable employment situation.
If these requirements are met, our chances of subrogating the mortgage to improve it will be much greater. With the following free simulator we can calculate how much we would save with the change:
How can I subrogate a mortgage?
We already know in which cases we could change banks, but what is the process to carry it out? We summarize it below:
- First step: contact banks and compare their offers. The ideal is to go to a minimum of three financial companies to have more options on the table.
- Second step: assess the counteroffer of our entity, if it makes it to us. Our current bank has, by law, 15 days from the submission of a subrogation offer to propose a counteroffer to us. If we accept it, we will have to formalize the modification with him.
- Third step: sign before a notary. If we prefer to leave our current bank, we will have to sign a deed before a notary to formalize the transfer to the new entity and the change of conditions.
Remember: with this operation, we can modify the interest rate, the term, the connection, and the commissions, but it is not possible to increase the capital or change the ownership of the loan.
Does surrogacy cost money?
By law, the vast majority of mortgage subrogation expenses are borne by the bank to which we transfer the loan. However, there are some costs that we must pay. Let’s see what they are:
- The cost of the appraisal: to formalize the transfer it is essential to appraise our home; a procedure that the client must pay.
- The commissions associated with the exchange: if they appear in the deed, we will have to pay the bank from which we leave the subrogation commission and the interest rate risk commission.
In general, the change almost always pays off, since the savings that can be obtained by subrogating the PHH mortgage is much greater than the cost of the operation. Now, just in case, it is always advisable to do numbers to make sure that it is worth going to another bank.
3 attractive offers to subrogate the mortgage and switch to the fixed rate
Subrogating the mortgage can be an opportunity to leave the Euribor behind and achieve stable installments if we prefer. As we can deduce, we are referring to moving from the variable rate to the fixed rate. Among other advantages, mortgage loans with a fixed interest are much less risky, since we will know from the beginning how much we will pay month after month. In addition, at the moment, although they are still somewhat more expensive than variable mortgages, fixed mortgages are enjoying their best moment with interest rates of around 1.50%. Here are three options to change the bank mortgage and live smoothly with improved conditions.
Bankia Fixed Mortgage Subrogation: the cheapest option
The Bankia Fixed Mortgage for subrogation offers an interest rate of 1.85% and does not apply commissions of any kind. Although, as we can see, this product may seem more expensive, the great advantage is that it does not require contracting additional products such as insurance or pension plans. The only condition to access the credit is to domicile an income of 3,000 euros.
Of course, in the case of moving the credit to this entity, we will have to pay the appraisal and bear the possible subrogation commission that our bank may apply to us since Bankia does not assume either of the two expenses.
Kutxabank Fixed Mortgage Subrogation: finances the penalty of our bank
If we take advantage of the change of bank to switch to the Kutxabank Fixed Mortgage for subrogation, we can sign an interest of 1.60% to be repaid in a maximum of 25 years. The Basque entity finances the possible subrogation commission that the client may have, so at the time of changing banks, only the appraisal would have to be paid. After calculating, we can say that the cost of paying the penalty in installments could cost additional tens of euros.
If we review the rest of the conditions, Kutxabank does not notify any type of commission, although it does highlight the need to direct deposit at least 3,000 euros per month, sign home insurance with the bank, and have a pension plan as requirements to get the discounted interest rate.