Mortgage novation in Spain: renegotiating with your bank
Your bank would prefer you don't know this option exists. Novacion means modifying your mortgage terms without switching banks: a rate change, a better spread, an extension of the term, or additional capital. It's the fastest and cheapest way to improve your mortgage — if you can get your bank to cooperate.
What you can change with a novacion
Almost everything:
- Interest rate: switch from variable to fixed, variable to mixed, or renegotiate the spread (diferencial).
- Term (plazo): extend it to lower monthly payments, or shorten it to pay less total interest.
- Capital: increase the loan (for example, to finance renovations).
- Borrowers (titulares): add or remove a borrower.
- Commissions: renegotiate future terms for early repayment, transfer, etc.
The advantage over subrogacion (switching banks): no bank change, no registry cancellation, and a faster process. The deed (escritura) is modified at the notary, but you're not creating a new mortgage.
What it costs
Novacion costs have dropped significantly since the 2019 LCCI law:
- Novacion commission: depends on what you signed. Many recent mortgages set it at 0%. Others charge 0.15% or up to 1%. Check your deed. Important: in 2024, switching from variable to fixed via novacion carried no commission by law (a temporary measure that has been repeatedly extended).
- Notary and registry fees: novacion has notarial and registration costs, but they're lower than a new mortgage. Under the LCCI, for variable-to-fixed changes, the bank covers these.
- Property valuation (tasacion): the bank may request a new one, especially if you're increasing the capital.
One user who negotiated a novacion with BBVA from variable to fixed shared: "I had a 2% novacion commission in my contract and they did it for 0%. I presented a FEIN from EVO Banco and they matched it."
How to get your bank to agree
Your bank is not obligated to accept a novacion. If your profile doesn't interest them or the deal isn't profitable, they'll say no. Their incentive is to maintain your current conditions, not improve them. Strategies that work:
- Bring a FEIN from another bank. This is the most effective lever. Your bank has a right of first refusal (derecho de tanteo) in a subrogacion, and many prefer to match rather than lose you.
- Meet with the branch director (director de oficina), not just the account manager. Directors have more authority to approve special terms.
- Know your target number. Decide what rate you want and don't accept the first counteroffer.
- Be a good customer but not a captive one. Having your salary deposited and a clean payment history helps, but make it clear you're willing to leave. Banks only move when they see the alternative is losing you.
A real case from the group: a user with Abanca, paying variable at euribor + 0.85%, asked to renegotiate. They offered a mixed rate at 1.85% for 5 years with bundled products — worse than external offers. He used the threat of subrogacion to push for better terms.
When to renegotiate vs when to switch banks
- Renegotiate (novar) when your bank matches or beats external offers, when your outstanding balance is low (under 100,000 euros), or when you need to increase capital or change borrowers (things subrogacion doesn't allow).
- Switch banks (subrogar) when your bank won't negotiate, when external offers are clearly better, or when you have a large outstanding balance that gives you bargaining power elsewhere.
As one advisor summarizes: "Under 15 years remaining, and at some banks under 20, they won't accept a subrogacion. So novacion is your best option."
The mixed-rate + future novacion strategy
Many borrowers sign a mixed-rate mortgage (hipoteca mixta) with a good fixed rate for 3-5 years, planning to renegotiate when the variable period begins. The key: make sure your deed has a novacion commission of 0% or very low. Ibercaja, for example, offers their popular 1.7% mixed rate but with a 1% novacion fee — forcing you to switch banks instead of renegotiating if you want to improve later. The bank puts that commission there deliberately. BBVA and CaixaBank tend to be more flexible on this point.