Between 2,500 and 3,000 euros more per year. This is the extra cost they have had to payon average, Variable rate mortgages whose interest has been reviewed in recent months. The cause? The rapid rise of the Euriborwhose value has skyrocketed above 4% (its price was negative a year and a half ago) due to the successive rate increases carried out by the European Central Bank to contain the high inflation in the euro area.
Faced with this increase in cost, there are not a few who wonder if they can change your variable mortgage to a fixed rate so as not to suffer from the rises in the Euribor. According to the financial comparator HelpMyCash.com, it can be difficult to achieve this, because the banks are interested in keeping their mortgagees tied to the Euribor, but not impossible: if the client plays his cards right, he can go to a fixed interest of around 3% and pay a stable and affordable fee.
Change a variable mortgage to pass it to the fixed rate.
It can be agreed with the bank itself or with another entity
Comparator analysts claim that this change can be achieved in three ways: through a agreement with the bank with which the mortgage is held (novation), with a loan transfer to another entity (creditor subrogation) or through the contracting a new fixed mortgage with which the outstanding mortgage debt at a variable rate will be settled.
To increase the chances of moving from the variable mortgage to the fixed rate, HelpMyCash advises exploring the three formulas in parallel. They recommend that the client request the change from his own bank and, at the same time, that contact other entities to request surrogacy offers or a new home loan with a fixed rate. In this way, if one or more finance companies reject the mortgagee’s claims, the mortgagee may have a plan B.
In addition, if the client obtains the approval of one or more entities, it will be able to present your offers to other banks to ask for counteroffers that equal or better their conditions. Haggling with various financial institutions will increase your options of obtaining a lower fixed interest and, consequently, paying a more affordable fee when the modification is formalized.
Mortgage increases
Operation cheapened by the Government
It should be borne in mind, however, that the three operations mentioned have a cost. In the case of novation and subrogation, the mortgagee must pay the appraisal of their home (if requested), which costs about 300 euros on average. And in the case of contracting a new fixed mortgage, you will have to pay the price of the appraisal and the expenses associated with the registration cancellation of the current variable rate loan, the average cost of which is about 1,000 euros.
For this change, however, no commissions to pay. According to Royal Decree-Law 19/2022, launched by the Government of Spain in November of last year, banks cannot charge commissions for creditor novation or subrogation if either of these two operations is carried out to transfer a variable mortgage to the fixed rate. In addition, they cannot apply any commission for early amortization if a variable rate mortgage loan is partially or totally paid off early, either to replace it with a fixed rate or for any other reason. Both bans will remain in force throughout 2023.
Change a variable mortgage to a fixed rate
The mixed type can be an alternative
Although converting a variable mortgage to a fixed rate is still viable, there is a possibility that the client will not be able to carry out this modification, either because they cannot find entities that accept their request or because they do not find any that offer a competitive fixed rate. . In such a case, there is a An alternative that allows you to pay stable and manageable installments for a certain time: change to a mixed rate through a novation, a subrogation or a new hiring.
If a variable mortgage is transferred to the mixed rate, the client will be able to enjoy a fixed interest for the next five, ten or 15 years, depending on what the bank offers. And in most cases, moreover, will pay a lower fee than if it were to go to the fixed rate, given that the initial interest of mixed mortgages is usually lower than that of fixed ones. Now, it must be borne in mind that protection against the Euribor will not be eternalsince the interest will become variable when the period of application of the fixed rate ends.
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