I want to transfer my mortgage loan to another bank. What do I have to do?
You have two options:
Take out a new mortgage loan with another bank and use it to make an early repayment of your old one.
Subrogate your mortgage loan: which means transferring your existing mortgage loan to another bank (the loan is not cancelled, but continues with a different lending credit institution). To do this, the bank must provide a binding offer showing the conditions of the new mortgage loan. Your old bank may, however, express its intention before a notary to either match or improve the new credit institution’s binding offer. In such case, the intended transfer would not take place and you would then be obliged to leave your mortgage loan with your original bank, but with improved conditions.
Both options – “taking out a new mortgage loan” or “subrogation” – entail costs (such as an early repayment fee). The first option will, however, entail a higher cost as it does not benefit from the exemption of paying tax on Documented Legal Acts or from a reduction on Notary and Land Registry fees, while the subrogation option does.
More information: Law 2/1994 of 30 March 1994 on subrogation and modification of mortgage loans.
For further information about mortgage loans, click here.