Remortgaging On An Existing Spanish Mortgage

Dealing with remortgaging your home in your own country is hard enough, however, throw in a language barrier and different laws and you enter the unknown.

That doesn’t need to be the case, Mortgage Matters Spain can advise and offer remortgage options in Spain, fully explained in Spanish, English, and French for your peace of mind.

In the past looking for a better deal on your current Spanish mortgage was not a viable option. Most of the banks were not keen to consider it.

In most cases, the cost of the mortgage deed tax, that was required to be paid on the new mortgage made it a worthless exercise. Any gain that you would make on an improved interest rate was negated by the level of mortgage deed tax due to be paid.

This changed last year when Spanish law regarding mortgage contracts was implemented, meaning that all costs relating to the mortgage were now to be paid for by the bank, not the client. This is excellent news for those clients, who took out mortgages between 2010 and 2015 when the margin on a variable rate was around 3 or 4% above EURIBOR, as they can now look for an improved deal at very little cost.

These days the Spanish banks have realised that offering remortgages for clients is good business. There is a reduced risk in lending to existing Spanish mortgage holders, who have a proven track record of making their monthly mortgage repayments religiously, rather than taking on new borrowers with no past performance. Therefore, they are keen to offer remortgage products to existing clients.

It is important to point out that remortgaging does not mean that existing borrowers can increase their existing loan amount.

The banks in Spain are still not keen on equity release and will only do it in very specific cases where it involves home improvements on the Spanish property.

Banks will lend up to a maximum of 60% LTV. The good thing is that the client only needs to cover the cost of the valuation of the property, the banks will also consider adding any subrogation fees to the loan amount.

If you do have an existing Spanish mortgage which is 5 to 10 years old, speak to us. We will offer you a free mortgage review to see how we can improve on your existing deal and save you money in the long term.

Drop us a call +34 951 120 072 to email us arrange either a socially distanced meeting or a virtual meet up online! We are fully regulated and offer Spanish Mortgages for residents, non-residents and overseas investors. Always make sure your mortgage broker is regulated by The Bank of Spain.

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