remortgage
If you already have a mortgage, but want to reduce monthly instalments , then maybe a remortgage ( subrogación ) could be the solution. This transaction allows you to change everything that is connected to the interest rate, such as the reference rate, the margin and the type of loan: you can switch from a fixed rate mortgage to a variable rate mortgage and visa versa. The other characteristics, i.e. the term and the pending amount, are unchangeable.
Nevertheless, some issues have to be considered at this point.
- At first, normally the bank where you contracted your mortgage will charge you an early repayment fee (look at your contract in order to find out). In the case of a variable rate mortgage, the maximum rate is 1%, and in both fixed and variable rate mortgages, the rate indicated in the contract is the one that counts, that means that if there is no repayment fee in the contract, you won't have to pay.
- If you ask the bank that granted you the loan for a copy of the valuation, you will save additional time and money.
- There are no taxes applicable to a remortgage, and the above mentioned costs plus the fees for Notary, Registry and Solicitor or Legal Advisor have to be weighted against and compared to the savings you will gain from a remortgage.
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