The cost of changing or cancelling a mortgage in Spain to drop sharply

The cost of cancelling a mortgage with a Spanish bank is to drop by 80%

The Economic and Finance Commission for the Senate is expected to pass the law on reforming the mortgage market so that this proposed legislation can be sent directly to congress. If the law is passed it will reduce the cost of modifying the conditions of a mortgage by up to 80%. It won’t have to go to the upper chamber again given that it has already been passed by the commission.

The measure has the support of all parliamentary groups except for IU-ICV. It is intended to reduce the costs of modifying the conditions of a mortgage by 80% as it will no longer be necessary to undersign a new mortgage therefore reducing considerably notary, registration and tax costs. The legislation will also affect ‘reverse mortgages’.

Mortgage cancellation costs: The cost of cancelling a mortgage will go down from 1% to 0.25%. This means that the cost of cancelling an average mortgage of 150,000 euros at 27 years will go down from 1500 euros to 375 euros.

Mortgage substitution costs: If you change your mortgage from a fixed or mixed to a variable interest rate the cost will remain the same at 0.25% except for when interest rates are below those at which the mortgage was taken out.
Notary costs: Going to a notary will now only cost 30 euros in contrast to the current costs which are calculated against the value of your assets with a minimum cost of 90 euros.

Registration Duties: The discount of 90% which currently only applies to substituting or renewing of a mortgage that is going from a variable to a fixed rate will apply to all mortgages. Therefore according to this the cost of cancelling an average mortgage will be reduced from 300 euros to 52.2 euros.

Registration Costs: These will be reduced from 111 euros to 25 euros.

Reverse Mortgages: These will be exempt from tax for legal and documentation costs and also notary duties will be reduced. Those people who have reverse mortgages can get a tax exemption of up to 10,000 euros when they make their tax declaration if the money from their reverse mortgage is going to be paid into a pension plan.

Related: Mortgages in Spain # Mortgages for non-residents in Spain