Property in Spain | Real estate Spanish-English glossary | Renegotiate a mortgage in Spain, Novación

Spanish-English Property dictionary

Novación-Renegotiate a mortgage in Spain

Section for people wanting to buy, sell or rent property in Spain.

The Spanish word Novación refers to a public document in which mortgage terms have been modified.

Generally it is a good idea to request the renegotiation of your mortgage contract if it is unfavourable compared to market conditions. For example if you are paying a fixed mortgage at a higher rate and interest rates fall it may be in your interests to negotiate modifications to your contract with your mortgage lender. Once this has taken place you must go with your new contract (public document) to a notary to get it signed. It is also possible (but expensive) to change from one mortgage lenders to another get more favourable mortgage terms.

Renegotiation is the simplest way of getting better mortgage terms. It consists in meeting with your mortgage lender (bank or building society) and negotiating some modifications to your mortgage such as a lower interest rate, changing from a fixed to a variable interest rate or the other way round, extending the term of the mortgage contract, modifying how the interest is calculated or changing the index used to calculate the interest.

If you are unhappy with the terms of your current mortgage, bear in mind that changing your mortgage from one Spanish bank to another is generally a very expensive business, and banks are reluctant to let a client with a mortgage go. Most banks include a clause in the mortgage contract specifying a penalty (usually 1% of the loan) to be paid by clients who suddenly pay off the total mortgage amount.

On the other hand, by law, Spanish banks must make a written offer to any potential mortgage client. So one option is to go to a bank offering more competitive rates, get a formal offer, and then go back to your own bank, show your bank rep the alternative offer, and ask him or her to match it.

Other useful links
Latest news on the property market in Spain Selection of news articles related to the real estate market here.
Mortgages in Spain, a brief introduction to the Spanish mortgage market, how it works and interest rates in Spain
Spanish banks, before applying for a mortgage, find out more about Spain's most popular banks and Spanish savings banks.
Property taxes in Spain, description of taxes involved in purchasing property and yearly property taxes in Spain.
Useful Spanish vocab for buying a house - you should learn at least the basic terms. Check out our pronunciation guide too.
Renting property in Spain - if you want to buy to rent, then read this section and our free notice board of property to rent in Spain.
Spanish lawyers - information on lawyers fees in Spain for property transactions
Houses for sale in Spain - take a look at the kind of houses available. Or check out our free Spain property for sale board.
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