Subrogation is not a free operation , so certain expenses must be met, including the following:the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.
Mortgage subrogation commissions
Normally in mortgages there is a clause that establishes a commission that will be applied in case of subrogation that is limited by law. In any case, depending on when the mortgage was formalized, these commissions may be between 1%, when the mortgage is formalized before 2003, and 0.5%, when the mortgage was formalized between 2003 and 2007.
For mortgages formalized after 2007, the commission will be a maximum of 0.5%, although the maximum will be 0.25% when the subrogation occurs after the first 5 years of the mortgage. This commission is only paid by the mortgage debtor when moving from one bank to another.
Notary and registry expenses
The subrogation entails a series of expenses in the Notary and in the Property Registry for the formalization of the new mortgage and for the registration of the mortgage in the Property Registry. These expenses will be paid, in the case of the Notary, the one that is subrogated, and in the case of the Property Registry, who registers the new mortgage.
The house must be appraised within the last six months before the sale takes place, being responsible for these expenses. However, you are only obliged to pay the new appraisal if you fail to meet the six month deadline.
When should it be subrogated?
Without a doubt, in order to answer this question, the ideal is to compare the conditions of the mortgage in which we intend to subrogate ourselves and the conditions offered by banks regarding mortgages at the specific time. For this, it is best to go to a comparator of financial products and see which option is the one that best suits our needs.