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Novación vs subrogación: changing your Spanish mortgage conditions
Your Spanish mortgage is not set in stone. Two legal mechanisms let you change it: novación (renegotiate with the same bank) and subrogación (transfer to a different bank). Both have different costs, different rights, and different sweet spots. Ley 5/2019 capped many fees, making these tools more accessible for non-resident borrowers who find their original terms uncompetitive after Euríbor swings or rate changes. This guide explains both, the cost breakdown, and a decision matrix to pick the right path.
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Novación vs subrogación — the key difference
Novación (modificative novation) — your current bank agrees to change one or more conditions of your existing mortgage. The mortgage charge stays in place, the bank stays the same, the only thing that changes is the contract terms. Governed by Ley 2/1994 + Ley 5/2019.
Subrogación de acreedor (creditor subrogation) — a different bank 'subrogates' (takes over) your existing mortgage. The mortgage charge in the Property Registry stays the same (same loan, same charge), but the creditor changes. Your original bank receives the outstanding balance from the new bank.
There is also 'subrogación de deudor' (debtor subrogation) — when you BUY a property and assume the seller's existing mortgage. This is a different concept and is not covered here.
Why this distinction matters: novación keeps your bank relationship; subrogación changes it. The economics, the negotiating leverage, and the cost structure are different.
Novación: changing terms with the same bank
What you can change: interest rate (TIN), reference index (Euríbor 12 months vs another), differential, term, payment day, currency, type (fixed↔variable↔mixed), bonifications, guarantors. The amount can also be changed (more borrowed, paid less), but increasing the principal triggers stricter conditions.
Cost (Ley 5/2019 cap): if the novación replaces a variable rate with a fixed one (or a mixed one with at least 3 fixed years), the commission cannot exceed 0.05% of the outstanding balance during the first 3 years, and is 0% after that. For other changes the fee is whatever the contract and the negotiation set, so ask for it to be waived.
Process: request a novación proposal from your bank. They issue a binding offer (oferta vinculante). If you accept, you sign a 'escritura de novación' at the notary. The amendment is registered at the Property Registry.
When novación is the right choice: if your bank values keeping you as a customer (you have other products with them — current account, cards, investments) and they're willing to match competitor rates, novación is faster than subrogación and needs no new appraisal. You also avoid the friction of opening a new banking relationship.
Subrogación: transferring to a new bank
How it works: you find a competing bank willing to offer better conditions. The new bank prepares an 'oferta vinculante' (binding offer). You present this to your current bank, which has 15 days to match (contraoferta). If they don't match (or you prefer the new bank), the subrogación proceeds.
Cost (Ley 5/2019 cap): your old bank can charge only the early-repayment compensation of art. 23. VARIABLE-rate mortgages: 0.25% of the balance repaid in the first 3 years or 0.15% in the first 5 (the contract picks one), then 0% — and only 0.05% in the first 3 years if the new loan is fixed. FIXED-rate mortgages: up to 2% in the first 10 years and 1.5% after. In every case it can never exceed the bank's real financial loss.
Other costs: you pay the new property appraisal (€250-€450, hipotecas.me estimate; Ley 5/2019, art. 14.1.e), although some banks refund it. Notary, registry and gestoría fees are paid by the new bank. In a novación you pay them yourself, at the reduced scales of Ley 2/1994 (art. 8): the notary charges it as a document without a stated amount (€30.05 plus pages, copies and VAT) and the registry applies its scale to 10% of the outstanding balance (about €34 with VAT on €150,000).
When subrogación is the right choice: if your current bank refuses to match competitor rates, or if you're moving from one banking relationship to a more favourable one.
| Aspect | Novación (same bank) | Subrogación (new bank) |
|---|---|---|
| Maximum commission (Ley 5/2019) | 0.05% y1-3 if variable→fixed or mixed (3+ fixed years), then 0% | Variable: 0.25% (3 y) or 0.15% (5 y); fixed: 2% / 1.5% |
| Property appraisal needed | Only if you borrow more | Yes, and you pay it (€250-€450, hipotecas.me estimate) |
| Notary fee | You pay it, reduced: €30.05 plus pages and VAT | Paid by the new bank (Ley 5/2019) |
| Registry fee | You pay it, on 10% of the balance: ~€34 on €150,000 | Paid by the new bank (Ley 5/2019) |
| Stamp duty (AJD) | Exempt for rate or term changes (Ley 2/1994) | Exempt (Ley 2/1994) |
| Your bank's reply | Negotiated | 15 days to match the offer |
| Your lever | Your bank's wish to keep you | A competitor's binding offer |
| Best when... | Bank values retention | Bank refuses to match |
Maximum commission (Ley 5/2019)
0.05% y1-3 if variable→fixed or mixed (3+ fixed years), then 0%
Variable: 0.25% (3 y) or 0.15% (5 y); fixed: 2% / 1.5%
Property appraisal needed
Only if you borrow more
Yes, and you pay it (€250-€450, hipotecas.me estimate)
Notary fee
You pay it, reduced: €30.05 plus pages and VAT
Paid by the new bank (Ley 5/2019)
Registry fee
You pay it, on 10% of the balance: ~€34 on €150,000
Paid by the new bank (Ley 5/2019)
Stamp duty (AJD)
Exempt for rate or term changes (Ley 2/1994)
Exempt (Ley 2/1994)
Your bank's reply
Negotiated
15 days to match the offer
Your lever
Your bank's wish to keep you
A competitor's binding offer
Best when...
Bank values retention
Bank refuses to match
Decision matrix — which path is right for you
Choose novación if: Your current bank is willing to negotiate; you have a strong banking relationship (multiple products); you want to avoid a new appraisal and a new bank; your savings from rate reduction don't justify the subrogación costs.
Choose subrogación if: Your current bank refuses to reduce your rate; another bank offers clearly better terms after costs; you have flexibility to change banking relationships.
Combined strategy (the smart play): Get a binding offer from a competitor (the new bank issues an 'oferta vinculante' after the appraisal, which you pay). Present this to your current bank. They have 15 days to match. If they match, take the novación (no change of bank). If they don't, proceed with subrogación. This is the BATNA approach.
For non-residents specificallyNon-residents often have less leverage with their original bank (because the bank made an exception to lend in the first place). Subrogación is harder for non-residents because the new bank must also approve you as a non-resident borrower. But it's not impossible: the new bank has to be one that lends to non-residents (CaixaBank (HolaBank), Bankinter, Banca March, UCI, Banco Santander and Banco Sabadell say so on their websites; BBVA, ING and Openbank lend to residents only).
Tax and reporting implications
AJD (Actos Jurídicos Documentados): deeds of subrogación and of novación that change the interest rate or the term are exempt (Ley 2/1994, art. 9). Increasing the amount borrowed is a different operation and can be taxed.
IRPF / IRNR implications: changing your mortgage rate doesn't trigger a tax event for you personally. Mortgage interest deduction (where applicable for residents) continues as before.
Reporting to Banco de España: the bank handles all reporting (CIRBE). You have no reporting obligation.
Insurance bundling: if your bonification depended on insurance policies, the novación or subrogación typically requires renewing or transferring those policies. Confirm in writing before signing.
Currency considerations: if you're changing the loan currency (e.g. euros to pounds) via novación — VERY rare and usually not permitted — additional tax and regulatory implications apply. Consult a Spanish tax advisor.
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Frequently asked questions
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About this content
Mortgage Content Editor
Published: May 2026
Last updated: October 2026
This page is informational and editorial in nature. It explains how the described mortgage conditions typically work and what to review, without guaranteeing results or replacing a lender’s assessment.