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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.
The essentials
9 min full read- 1Novación = modification with your CURRENT bank. Subrogación = transfer the mortgage to a DIFFERENT bank, keeping the property charge
- 2Ley 5/2019 capped novación fees at 0.15% of outstanding balance (years 1-3) and 0% from year 4 onwards
- 3Subrogación fees capped at 0.15% (years 1-3) for fixed rate, 0.25% (year 1) decreasing to 0% by year 4 for variable
- 4Novación can change: rate, term, payment date, currency, type (fixed↔variable), bonification structure
- 5Subrogación typically achieves better rate reductions than novación — banks compete aggressively to acquire portfolio
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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 (treated in our selling property guide).
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): commission for novación cannot exceed 0.15% of outstanding balance during years 1-3, and is 0% from year 4 onwards.
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. Total time: 4-8 weeks.
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 cheaper and faster than subrogación. 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): for FIXED-rate mortgages: 0.15% commission during years 1-3, then 0%. For VARIABLE-rate mortgages: 0.25% commission in year 1, decreasing to 0% by year 4.
Other costs: new property appraisal (€300-€500), notary fees (~€500-€700), property registry fees (~€200-€400), gestor (€200-€400). Some banks absorb these in their offer (subrogación 'gratis'); others pass them through.
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. Subrogación typically delivers larger rate reductions than novación because the acquiring bank has strong commercial incentive.
| Aspect | Novación (same bank) | Subrogación (new bank) |
|---|---|---|
| Maximum commission (Ley 5/2019) | 0.15% y1-3, 0% from y4 | 0.15% (fija) or 0.25%→0% (variable) |
| Property appraisal needed | Rarely (~€0) | Yes (~€300-€500) |
| Notary fee | €300-€600 | €500-€700 |
| Registry fee | €100-€250 | €200-€400 |
| Typical total cost | €500-€1,500 | €1,000-€2,500 |
| Typical time | 4-8 weeks | 6-12 weeks |
| Rate reduction typical | 0.10-0.40 points | 0.30-0.80 points |
| Best when... | Bank values retention | Bank refuses to match |
Maximum commission (Ley 5/2019)
0.15% y1-3, 0% from y4
0.15% (fija) or 0.25%→0% (variable)
Property appraisal needed
Rarely (~€0)
Yes (~€300-€500)
Notary fee
€300-€600
€500-€700
Registry fee
€100-€250
€200-€400
Typical total cost
€500-€1,500
€1,000-€2,500
Typical time
4-8 weeks
6-12 weeks
Rate reduction typical
0.10-0.40 points
0.30-0.80 points
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 speed (4-8 weeks); your savings from rate reduction don't justify the higher subrogación costs.
Choose subrogación if: Your current bank refuses to reduce your rate; another bank offers significantly better terms (>0.40 points lower); you're willing to invest 6-12 weeks for larger savings; you have flexibility to change banking relationships.
Combined strategy (the smart play): Get a binding offer from a competitor (force the new bank to issue 'oferta vinculante' — costs them appraisal but it's their pitch). Present this to your current bank. They have 15 days to match. If they match, take the novación (cheaper). 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 — banks like Sabadell, Openbank, BBVA actively acquire non-resident files. Plan 8-12 weeks for non-resident subrogación.
Tax and reporting implications
AJD (Actos Jurídicos Documentados): technically due on any change of mortgage conditions, but the tax base is the difference (if any) in principal — most novaciones for rate-only changes have ZERO AJD due. Subrogación is also typically AJD-free (no new mortgage, just transfer).
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
Can my bank refuse a novación request?
Yes. The bank is not legally obligated to accept your proposed changes. They will analyse profitability — typically they accept rate reductions if (a) you're a long-term customer with low default risk, or (b) you credibly threaten to subrogate elsewhere. Bring a competitor's binding offer to strengthen your case.
Can my current bank block a subrogación to stop me leaving?
No, but they have a 'right of last refusal' — once you present them with another bank's binding offer, they have 15 days to match or improve it (contraoferta). If they match, you can accept (taking the better rate from your current bank) or insist on the new bank anyway. If they don't match, the subrogación proceeds and they cannot legally block it.
How much can I save by subrogating or doing a novación?
Highly variable but typical: 0.30-0.80 percentage points off your TIN. On a €300,000 mortgage at 25 years, every 0.10 points saved = ~€16/month or ~€192/year. A 0.50-point reduction = €960/year. Calculate carefully: if total novación/subrogación cost is €1,500 and saves €960/year, payback is 19 months. Anything over 24-month payback is borderline.
Can a non-resident do a subrogación as easily as a Spanish resident?
Slightly harder. The new bank must approve your non-resident profile (just like an original mortgage). Plan for the same scrutiny: documentation, foreign income verification, NIE, deposit history. Realistically: 8-12 weeks for non-residents (vs 6-10 for residents). Some banks (Sabadell, BBVA, Openbank) are more receptive to non-resident subrogación than others.
Can I do both novación AND subrogación on the same mortgage?
Yes, in sequence but not simultaneously. Common pattern: try novación first (cheaper), then if your bank refuses, proceed with subrogación. You can repeat novaciones every few years if rates keep moving. Be careful about consecutive subrogaciones — they're more expensive and banks may flag a customer as 'rate-shopping' which affects future approvals.
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About this content
Mortgage Content Editor
Published: July 2026
Last updated: July 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.