Throughout this year, banks have not been able to charge commissions to clients who have converted their variable mortgage into a fixed one. By virtue of Royal Decree-Law 19/2022, in force since November 24 of last year, the application of commissions for this operation has been prohibited, whether it was formalized through an agreement with the bank (novation), the transfer to another entity (subrogation) or signing a new loan to cancel the current one.
This ban, however, is about to expire, because the measure will no longer be in force as of January 1, 2024 (including that day). Is it then advisable to switch to the fixed rate before the end of the year? According to the financial comparator HelpMyCash.com, advancing the operation can save the client from hundreds to thousands of euros, although there is also the possibility that the Government of Spain extends the decree for another year.
And how much do these commissions prohibited by Royal Decree-Law 19/2022 cost? Comparator analysts affirm that it depends on the operation that is carried out to change from the variable to the fixed rate. The maximum commission for carrying out this operation through a novation or subrogation is 0.05% of the pending amount. For example, if a client has an outstanding variable mortgage of 150,000 euros and converts it to a fixed interest with a novation or subrogation, they will save 150 euros if the modification is formalized until December 31.
You can also take out a new mortgage, at a fixed rate, to pay off the one you have at variable interest. In this case, as of January 1, 2024, the commission for early repayment of the current loan at a variable rate may be applied, the cost of which may never exceed 1% of the outstanding amount. That is, a client with a mortgage loan like the one in the previous example will be able to save a maximum of 1,500 euros if he carries out this operation before December 31.
From HelpMyCash, however, they clarify that it is not 100% certain that this measure will expire on December 31 of this year. Before the investiture of the new Executive took place, the previous and current Minister of Economy, Commerce and Business, Nadia Calviño, stated that she intended to meet with the banking employers’ association to study the possibility of extending Royal Decree-Law 19/ 2022.
As of today, that meeting has not yet taken place nor is it known whether only part of the decree or all of its measures will be extended. Now, the possibility cannot be ruled out that it will be agreed to extend the prohibition on charging commissions for one more year in the event of changing a variable mortgage to a fixed one.
Therefore, if a client is in a hurry to make the change, it is recommended that they explore options now and formalize it before the end of the year to ensure that they do not pay commissions. And if you prefer to take it a little calmly, you may or may not be able to save that charge depending on the outcome of the meeting between Minister Calviño and the bank employers.
In any case, it must be kept in mind that converting a variable mortgage into a fixed one is not completely free, because the other expenses associated with the operation have not been prohibited. If the change is formalized with a novation or subrogation, the client must pay the cost of the appraisal of their home, which costs about 300 euros. And if a new fixed mortgage is signed to cancel the one you have at a variable rate, you will have to pay the appraisal and the expenses associated with the registration cancellation of the current loan, which is worth about 1,000 euros on average.
And how is it more worthwhile to make the change? It will depend on both the cost of the operation and the conditions that are achieved. HelpMyCash recommends making an appointment with the bank itself and requesting offers from other entities that are open to carrying out this conversion, such as BBVA or Openbank. In this way, the client will be able to consider more options, make numbers and opt for the most convenient proposal.
