How to pay less for your variable mortgage in 2023

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In the last year, those who chose to apply for a variable mortgage have seen their payments increase, on average, by more than 300 euros. The ECB's interest rate increases have been harsh, and that is why, below, we Sri Lanka Phone Number List explain how to pay less for your variable mortgage in 2023.  

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Pay less for your variable mortgage
The rise in ECB rates has led to that of the Euribor, and this has led to that of your quotas; This is how the interest of a variable mortgage works . It depends on an indicator, generally the Euribor, plus a differential. If the Euribor is high, so are the interests and your installments become more expensive.   

Surely, if at the time you chose to apply for a variable mortgage it was because the Euribor was favorable and the escalation you have experienced was not foreseen. But don't worry: you will immediately know how to pay less for your variable mortgage. You have three formulas.

1. Novation
The novation of a mortgage is, simply, the renegotiation of the conditions of your mortgage with the bank. These are some of the aspects you can try to change:

The amount of capital borrowed.
The amortization  period .
The interest rate .
The amortization  system .
The benchmark index .
In June 2023, the month to which the latest data on mortgages from the INE correspond , 11,176 registration changes were made, of which 8,633 were novations. Among them, many involved a change to the fixed rate, but there are ways to stay at the variable rate and reduce it: modify the repayment period or the capital borrowed, for example.

For the client, novation means paying a new appraisal and a novation fee that usually means between 0.5% and 1% of the outstanding amount.



Recommended reading:   Euribor in 2024: what is the forecast?
2. Surrogacy
The cheapest way to improve your mortgage is to transfer it to another bank, one that offers you more favorable conditions. Returning to the June data from the INE, in that month there were 2,038 creditor subrogations. Use the Housfy  mortgage comparator and study the conditions offered by other banks.

As was the case with novation, in a subrogation the client must assume the costs of a new appraisal and a subrogation commission . For variable mortgages established after June 16, 2019, the commission cannot exceed 0.25% of the outstanding capital, although if it is earlier it can reach 1%.



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3. Cancellation of the mortgage
Just because you have signed a mortgage with a bank does not mean that you have to go all the way with it. You can simply cancel it and open a new one . This is the most expensive way to improve your mortgage , since it involves assuming all the costs of opening a new one, but also for this reason it is the one that allows for the most radical change.

Housfy's mortgage plus expenses simulator will be very useful for evaluating this option. Fill in the variables and study what opening a new mortgage would mean for you.