Guide

Mortgage subrogation: switching banks (or borrowers) without cancelling the loan

Updated: July 12, 2026

Signing a mortgage doesn’t mean marrying your bank for life. If market conditions improve — or your profile improves — you can take the loan to another lender without cancelling it or paying the costs of a new mortgage. That is subrogation.

Two different subrogations

Creditor subrogation (the usual one): you switch banks while keeping the loan. The new bank “buys” your mortgage from the old lender and applies its own conditions: another interest rate, another spread, or a switch from variable to fixed.
Debtor subrogation: the borrower on the loan changes. It is common when buying a home with an existing mortgage (typical with new builds, taking over the developer’s loan): you save part of the costs of setting up a new one, although the bank must approve your creditworthiness.

How much it costs

Creditor subrogation has been regulated since 1994 (Ley 2/1994) and made cheaper by Ley 5/2019:

Fee payable to the original bank: capped by law with the same limits as early repayment — on variable-rate mortgages, 0.25%/0.15% only in the first years and 0% afterwards; on fixed-rate ones, up to 2% in the first ten years and 1.5% afterwards. For the details, see the early repayment guide.
Costs of the operation (notary, land registry, administrative agency): borne by the lenders since Ley 5/2019. At most, you pay for the new valuation.

Indicative total for the customer: a few hundred euros, compared with the thousands it would cost to cancel and set up a mortgage from scratch.

When it pays off

The maths is simple: it pays off when the interest savings comfortably exceed the costs of the switch. Clear signs:

You signed with a high spread (Euribor + 1.5% or more) and today the market offers considerably lower spreads — check it in the mortgage comparison.
You want to move from variable to fixed or mixed because the Euribor keeps you up at night — the change from variable to fixed also comes with especially reduced fees.
You have many years left on the loan. The savings multiply with every remaining year; with the mortgage almost paid off, it rarely pays off.

Before making a move, show your bank the competition’s offer: a counter-offer (novation) gets you the same result without switching lenders, and banks fight to keep healthy mortgages. Simulate below how much your monthly payment would change under the new conditions and decide with numbers.

Frequently asked questions

What is mortgage subrogation? ▼

Changing one of the parties to the loan without cancelling it: creditor subrogation moves your mortgage to another bank with better conditions; debtor subrogation changes the borrower (typical when buying a home that already has a mortgage).

How much does it cost to move a mortgage to another bank? ▼

Much less than cancelling and opening a new one: the fee is capped by law (at most between 0.15% and 2% depending on the type of mortgage and the year, the same as early repayment) and since Ley 5/2019 most of the costs of the operation are borne by the banks.

What is the difference between subrogation and novation? ▼

Novation means renegotiating the conditions with your own bank (rate, term, principal); creditor subrogation means taking your mortgage to another lender. If your bank won't beat the competition's offer, subrogation is your negotiating lever.

Can I switch from variable to fixed when subrogating? ▼

Yes, it's one of the most common uses: subrogating to another bank (or novating with yours) to move from a variable rate to a fixed or mixed one. The rules even lower the fees when the change is from variable to fixed.