Experts point out that savings through subrogation can reach 26,000 euros, due to the sharp decline in interest rates in recent years

Savings of up to 26000 euros throughout the remainder of the life of the mortgage

This is the promise of subrogation that is the transfer of the loan from one bank to another in search of a more advantageous price than that established at the time of signing

Experts say that if this movement takes place now after a notable drop in interest rates compared to the level they reached at the beginning of the last decade the monthly payment with which the money lent by the bank for the purchase is returned of the house becomes much lighter

Of course to obtain a very low interest rate the users profile has to be solvent

One of the keys perhaps the most important is in the Euribor This index which is used to calculate the interest rate of variable mortgages has been installed in negative territory for more than four years that is it subtracts instead of adding and closed September at 0415 its alltime low

This dramatic drop doesnt just make variable home loans cheaper Since these have become unprofitable for banks lenders try to attract customers with especially attractive fixed interest rates which opens a real range of economic improvements for all those who change their bank mortgage whether they want to change to the type fixed or keep it as if they prefer the floating rate

In the case of very good profiles fixed mortgages of around 2 and variable mortgages at 1 are being granted something that occurred in some specific months of 2010 but which until now had not been seen again highlights the director of Mortgages of the bank comparator iAhorro Simone Colombelli

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Therefore we have cases of mortgages with spreads higher than 35 that could save a lot whether they change to a variable or if they prefer to continue with a fixed one but in another bank adds Colombelli who emphasizes that this transfer It can also be a good opportunity to get rid of the products linked or combined with the loan without losing benefits such as the deduction for primary residence

When changing banks lightens your mortgage paymentThe variable mortgage index fell again in September and marks a new alltime low

When changing banks lightens your mortgage paymentIf you have paid your mortgage expenses these are the returns you can ask for
A change with advantages
If the values terms and average interest rates of the mortgages that have been signed since 2010 by Autonomous Communities and per year are analyzed it turns out that the mortgaged ones who have the greatest probability of saving more if they subrogate now are those who signed their loan in 2013 according to iAhorro calculations

It must be taken into account that in that year interest rates averaged 410 according to INE data a very high level if compared to the 15 that some user profiles get if they can go beyond the commercial offer and negotiate with the bank It is very likely that we will not see prices as low as the current ones in the future says the codirector general of the MyInvestor neobank Nuria Rocamora

Of the decade analyzed 2013 is the year in which the mortgage was signed in which in more Autonomous Communities the highest average savings were achieved by subrogating it now

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At that time the average amount of mortgages that were established in Spain was 95187 euros Madrid being the most expensive Autonomous Community with an average of 136981 euros followed by the Basque Country with 121734 euros and the Balearic Islands with 117550 euros

Since the average interest rate for fixed and variable mortgages calculated by iAhorro may today be around 26 points lower than the one obtained when they signed their loan if these mortgages decided today to transfer it to another bank they could save 25881 euros 23001 euros and 22210 euros respectively

A borrower who had acquired his home through a mortgage in 2013 in Catalonia could now find an offer on the market that would allow him to save up to 20700 euros in his pocket

In the case of Navarra this saving would reach 20594 euros Those who would gain the least from the change Extremadura would benefit from a reduction of up to 13840 euros

And of the entire series analyzed the buyer who would save the least would be an Extremadura who had taken out his mortgage in 2019 and subrogated it now with a final discount of 9762 euros

The fixed win
We must also take into account that in the subrogation we will save more as long as the price of the mortgage is higher For this reason in the case of the second residence the price will vary less than in the first as there are lower mortgages says Colombelli

In the case of the Valencian Community the average price is lower despite being one of the main provinces of Spain because there are many second homes but if we only compare the capitals it is possible that the photo was very different and Valencia capital would look more like Madrid or Barcelona he highlights

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Be that as it may the subrogation seems to promote more mortgages with fixed interest rates a very clear trend that MyInvestor has registered So far in 2020 almost 75 of the loans we have granted are subrogations and of these almost half are at a fixed rate which represents a great change in trend

In 2019 only 20 of the clients who changed their mortgage did so at a fixed rate says Rocamora Some data that is registered in the framework of a growing general interest towards fixed loans which have gone from representing just 4 in 2010 to reaching 474 of the mortgages that were signed in July

As for who can benefit more from a subrogation Colombelli says he is convinced that it could be among others an urban profile with a mortgage that is in its initial phase and that at the time of contracting the loan did not obtain good conditions but now after having had a professional change with an improvement in his financial situation he can find lower interest rates

It should also be borne in mind that subrogation is more interesting in the first years of the mortgages life As the years go by the interest paid is reduced and more capital is amortized so the savings achieved is much lower he concludes

By Vil Joe

A writer and editor based out of San Francisco, Vil has worked for The Wirecutter, PCWorld, MaximumPC and TechHive. Her work has also appeared on InfoWorld, MacWorld, Details, Apartment Therapy and Broke-Ass Stuart. In her spare time, she takes too many pictures of her cats, watches too much CSI and obsesses over her bullet journal.

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