We explain how you can switch a variable-rate mortgage to a fixed rate or vice versa.
One of the biggest fears of clients with a variable-rate mortgage is that Euribor will rise and their monthly repayment with it. When interest rates and Euribor are rising, many clients look to switch their variable-rate mortgage to a fixed rate to avoid higher repayments.
Likewise, when Euribor falls, those with fixed-rate mortgages at a high interest rate look to change their mortgage to lower their repayment.
This is where the questions arise: Is it possible? How much does it cost? Who pays the costs? How is it done? Do I need the bank's permission?
Can I switch my variable-rate mortgage to fixed or vice versa?
Yes. It's possible and you can do it at any time.
How much does it cost to switch a mortgage from fixed to variable?
The only cost the client bears is the novation fee, if it's set out in the mortgage deed.
Who pays the costs?
The bank bears most of the costs, except the cancellation fee, which the client pays only if there is one.
Steps to switch a variable-rate mortgage to fixed
- Submit an application to the bank
- The lender approves the new terms
- Signing before the notary
- Registration at the Land Registry
FREE FINANCIAL ADVICE
Do I need the bank's permission?
Yes. Although the bank should make the whole process easy and offer good terms so as not to lose the client.
At Valoracasa we have a finance department specialising in mortgage management. If you want to improve or change your mortgage, you can contact our advisors and they'll tell you free of charge how they can help.
Our department will negotiate directly with all the lenders to offer you only the best deals on the market.
Blog written by:
Juan Rosado
CEO
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