The most important factors when changing mortgages

Improving your mortgage is possible. There are different ways to achieve this, one of them is mortgage subrogation that is nothing more than changing your bank loan to get better conditions. Would you like to reduce quota, interest rate or repayment term? We tell you how to do it.

Subrogation: What would you like to change about your mortgage?

Subrogation is changing the mortgage loan of your financial institution to another that offers you better conditions that involve savings. Subrogating a mortgage does not mean taking out a new mortgage loan with new conditions. Surrogacy involves maintaining the same funding but improving one or more aspects of it.

Nor should we confuse it with the novation that consists of sitting down again with your bank to renegotiate certain conditions that today may be out of the market. Think that a mortgage usually lasts more than a decade so the markets can change a lot, making abusive certain clauses that were once common.

There is also the possibility of canceling the mortgage loan to request a new one with completely renewed conditions. In this case, calculations must be made to calculate whether the cancellation and registration fees are worth it to extinguish the loan.

What conditions can we improve in your mortgage subrogation?

Not everything is allowed and although there are several conditions that can be improved, there is also a law that imposes limits on surrogacy.

What then can we improve on your mortgage through subrogation?

  • The repayment term: We may request an extension or reduction in the useful life of your mortgage. This means that for example you can pay your loan in more years than initially agreed.
  • The commissions: We can negotiate the current commissions of your loan so that they play in your favor. We get the new entity to offer you lower commissions, as well as a reduction in the products linked to the mortgage.
  • The interest rate: If today the interest rate you pay has become obsolete with respect to market conditions, we can negotiate with the new entity a more updated interest rate that considerably reduces the price of your mortgage and of course your monthly payment.
  • In addition, we can also negotiate the transformation of your variable-rate mortgage into a fixed-rate mortgage, or vice versa.
  • Other conditions: if you have clauses that you consider abusive, or that are detrimental to you, such as the currency, the reference index or the floor clause, we can also change them in the new bank.

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By Catharine Bwana