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What it is

How to switch your mortgage to another bank cheaply

BOE step 7 of 7 · Passed

It is a government bill. Introduced by the Government. It was introduced on 28 January 1994. Introduced by: Gobierno.

Official title: Government bill on subrogation and modification of mortgage loans.

Follow this law

Source: Congreso de los Diputados, file 121/000038· updated 11 Nov

Automatic summary, not yet reviewed

  1. Allows the borrower to move their mortgage loan to another financial institution without the current bank's consent. The new institution presents a binding offer, and the original bank can only block it by improving the terms within fifteen calendar days.
  2. Caps the early repayment fee on variable-rate mortgage loans: if no fee was agreed, nothing is charged, and if a higher fee was agreed, at most 1% of the outstanding principal is charged.
  3. Regulates the subrogation deed, its registration in the Property Registry through a marginal note, and the requirements to foreclose on the mortgage. The deed may only include an improvement in the interest rate.
  4. Cuts costs: subrogation deeds and modification (novación) deeds are exempt from the Stamp Duty tax, and notary and registry fees are calculated on the outstanding principal.

Who it affects

  • People with a variable-rate mortgage: They can switch banks or renegotiate terms paying lower fees and taxes.
  • Financial institutions: They can win mortgages from other banks through subrogation, and must accept fee limits.
  • Notaries and property registrars: They authorize and register subrogations with fees based on the outstanding principal.

Words worth knowing

Subrogación (subrogation)
Moving the mortgage loan from one lender to another, which then collects the debt instead of the original bank.
Amortización anticipada (early repayment)
Paying back part or all of the loan money before the agreed time.
Novación modificativa (loan modification)
An agreement with the same bank to change mortgage terms, such as the interest rate, without switching lenders.
Nota marginal (marginal note)
A note added next to the mortgage entry in the Property Registry to record the change of lender.
Actos Jurídicos Documentados (Stamp Duty)
A tax on notarial documents such as public deeds.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries

Where it stands

How far did it get?

It took 7 of 7 steps. It reached BOE, and today it is passed.

  1. Introduced28 January 1994Someone registers the text in the Congreso.
  2. Admitted1 February 1994The Bureau of the Congreso accepts it and, for a members’ bill, the plenary decides whether to consider it.
  3. Amendmentsno dateGroups propose changes.
  4. Committeeno dateA committee goes through the text in detail.
  5. Plenaryno dateAll 350 deputies vote.
  6. Senateno dateThe Senate can pass it, amend it or veto it.
  7. BOEno dateIt is published in the Official State Gazette (BOE) and comes into force.
See the 2 official steps on a timeline
Jan 199411. 28 January 1994: Presentación22. 1 February 1994: Calificación

Was there a plenary vote?

We have no plenary vote linked to this law in the Congreso’s data.

What happens next

What happens now?

It is law, or will be once published in the BOE. It comes into force on the date its own text sets.

The same initiative in the other chamber:

Published in the BOE: Law 2/1994, of March 30, on subrogation and modification of mortgage loans.

Sources

Where does all this come from?

  • The data comes from the open files of the Congreso, the Senate and the BOE, unaltered.
  • Each deputy’s province is the one of their seat on the day of the vote.
  • We only say “passed” or “rejected” when the majority needed is certain; otherwise we say which side had more votes.

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