Be aware of the subrogation and novation commissions applied to mortgages
When it comes to signing a mortgage, it is important to pay special attention to all the commission expenses that we could come across during the mortgage duration.
The subrogation fee is a percentage of the outstanding capital to be paid in the case of changing banks without cancelling the mortgage. The reason to change banks in most cases is down to taking advantage of more advantageous terms, but when it comes to numbers this commission has to be taken into account in order to make a real assessment.
The fee for mortgage renewals (novation) or modifications is applicable when we change the conditions of the mortgage but without changing the financial institution, for example, when a lower interest rate is requested or a change in any of the mortgage clauses is signed. Financial institutions charge this fee for administrative costs entailed by the change or modification of some of the clauses of the mortgage deeds. There are some changes that do not carry commission, which can be free and that can be done by private document signed between the Director of the entity and the holder.