Re-mortages in Spain
Spanish Banks have in general withdrawn from offering
re-mortgages in Spain. The reason for the withdrawal started with the need to
reduce mortgage books and has continued due to concerns of taking over another banks loans and the risk
of default.
High costs
The costs of moving a loan also prevent a very active
re-mortgage market.
Mortgage deed tax which is around 1.8% of borrowings the
largest cost but even if this can be avoided other costs including, bank fees,
valuation fees and notary and land registry fees will total around 2% of
borrowings.
Gibraltar based Banks
Some homeowners in Spain took out loans with lenders
including RBS ( Nat West) Gibraltar , Jyske bank and Nordea and completed with full term interest only
mortgages for up to 15 years. At the end of those 15 years the loan had to be repaid in full. The lack of a re-mortgage
market is hitting these borrowers hard.
On a case by case basis a handful of lenders will look at
taking over a loan that has to be repaid and it is one of the few circumstances
where this can be considered.
Terms and conditions
Any new loan will be repayment and the new lender will
insist compulsory products are taken including bank account, life cover and
house insurance. Overall rates will not be as favourable as those the
applicant who used Gib based banks had before.
Read the full article:-Current situation for re-mortgages in Spain
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