When is the best time to renegotiate your mortgage?

Each person’s personal and financial circumstances are not always stable. When you sign a mortgage loan for 20 or 30 years you do it knowing what your income is at that moment, the type of job you have and the savings you have. However, external or personal factors can change your economic situation. It is precisely at that moment when you must start the process to renegotiate your mortgage.

Why am I interested in renegotiating my mortgage?

To improve the conditions of your mortgage credit. Through novation we have the possibility to renegotiate these conditions with the bank in order to make them more favorable for us. We can also go to a different entity and ask them to make us a better offer than the one we already have. We are talking about two types of operations:


Public document in which it is modified by agreement between both parties, one or more of the conditions of the mortgage loan formalized in the past. What can we change?

  • The repayment term. We can lengthen it, cut it or agree on a lack.
  • The interest rate. In this case we have the possibility to negotiate with the bank a lower interest, change the reference index, change the rate model (from fixed to variable or vice versa), reduce the linkage, eliminate commissions …
  • Modify the amount that remains pending from the mortgage. It can be achieved through a capital increase
  • The ownership of the mortgage. Holders can be added or removed and even beneficiaries and heirs can be changed in certain cases


That is, transfer the mortgage to another bank. In this case we can modify:

  • Aspects related to interest.
  • The repayment period.

Surrogacy has limits that novation does not have. In other words, we cannot renegotiate certain issues.

  • Reduce or increase loan capital
  • Add or remove holders from the contract
  • Add or remove guarantors to the contract

In addition, subrogation is associated with a series of expenses that we must take into account to know if it really compensates us to change our mortgage bank. For example, transferring a mortgage loan from one bank to another involves paying a commission whose cost varies between 0% and 2% of the outstanding amount. In addition, the client must also pay the cost of the appraisal of the house.

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By Catharine Bwana