Buy off plan: keys to understanding the loan of the promoter
11/09/2025
When a housing development is built, it is usual for the developer to finance the work through a loan granted by a bank. This type of financing, known as a developer loan, allows future buyers to subrogate to the part that corresponds to their home (subrogation).
If you are thinking of buying an off-plan home, it is important that you know what guarantees protect your advances during construction, what happens if you decide to subrogate yourself and what documentation the bank must give you.
- Special account for advances in housing under construction
When a home under construction is purchased, the advance money must be paid by the developer into a special account guaranteed with a guarantee or insurance and intended exclusively to finance that specific promotion.
If the work is not finished, that guarantee will allow you to recover the advance money.
The bank is obliged to demand that guarantee when opening the account because, if it does not, it may be responsible for returning the money to you, as established by the Supreme Court.
- Surrogacy or new mortgage?
Upon receiving your home, you can choose to hire a new mortgage or subrogate to the loan of the developer, usually in previously financed promotions.
To assess which option best suits your situation, you can use our mortgage calculatorsAbre en ventana nueva, which will allow you to compare conditions and calculate the total cost of each alternative, since each option entails certain expenses and it is important to make a good assessment before making a decision.
- Debtor Surrogacy Commission
If you decide to subrogate, you assume the corresponding part of the loan. The bank may apply for a commission if so agreed in the contract.
Many buyers are confused to think that the commission for subrogating themselves to the developer's loan is the same as that applied in an early cancellation, when in fact they are different concepts.
In addition, the subrogation requires the approval of the bank, since the loan was granted under specific conditions. By assuming it, you inherit their rights and obligations, unless a modification is agreed.
- What documentation does the bank have to give you?
According to Law 5/2019, of March 15, regulating real estate credit agreements, the bank must give you the pre-contractual disclousure documentAbre en ventana nueva (such as the FEIN and the FiAE) at least ten calendar days before signing.
This obligation also applies if the terms of the loan are modified by a novation. The goal is that you can know the conditions well before signing.
“Disclaimer: Please note that this is a translation of the original in Spanish that has been obtained using eTranslation (the machine translation tool provided by the European Commission), with the intention of giving you a basic idea of the content in English until a human translation becomes available. The Banco de España accepts no liability whatsoever in connection with this translation.”
