With the significant increase in mortgage interest rates in recent months, the 2023 Budget Law provides for a simplified procedure for switching from a variable rate mortgage to a fixed rate mortgage, which is relatively more convenient. In addition to the possibilities of renegotiation, subrogation and replacement, there is the possibility of renegotiating the mortgage with your bank by changing the rate without additional costs.
The 2023 Budget Law provides for the possibility, until the end of 2023, to switch from a variable rate mortgage to a fixed rate mortgage without costs, provided that certain conditions are respected:
This is a solution that repeats what was already foreseen in 2012 by the government.
There are also other methods for changing your mortgage if it is difficult to meet the repayments: here are the ones:
Renegotiate the mortgage
The first way to change your mortgage, for example going from a variable rate mortgage to a fixed rate one, is to renegotiate the mortgage. This operation, free of charge, with no limits on the amount and which can be repeated an unlimited number of times, consists of changing the conditions of your mortgage without changing banks. It is the simplest procedure: just contact the bank with which we have contracted our mortgage and propose the operation.
Mortgage subrogation is the second way to change a mortgage without costs; through this procedure we can in fact change the conditions of the contract, including the bank with which we stipulate it. With subrogation, the mortgage is transferred to another bank, which will be able to apply different and better conditions, maintaining the mortgage amount. In this case the new bank takes over the contract, without any costs for the customer, paying off the mortgage at the old bank in his place.
A third way to change the mortgage by paying off the old one and then requesting the provision of a totally new loan is to replace the mortgage. In this way the contract is completely rewritten with new rates, new duration, new amounts. In this case there are costs to be borne, such as those of the new notarial deed, borne by the borrower, with related costs of investigations, appraisals and insurance.
Considering that the renegotiation of the mortgage is a practice that has already been foreseen, and already free, for some time, in theory the 2023 Budget Law does not introduce any important innovations in this sense; however, the fact that specific requirements are introduced in the new budget law suggests that, if these are respected, the requests cannot be rejected by the banks, as sometimes happens.
According to Altroconsumo, a borrower with a variable rate mortgage taken out in 2019 could today hypothetically have a residual amount of 150 thousand euros to be repaid in 22 years with a one-month Euribor rate plus a spread of 1.5 percent. For a total rate of 3.3 percent, the installment would amount to just under 800 euros per month, but likely to increase in the future; by switching to a fixed loan, at current rates, you would incur a constant installment of 870 euros for the entire duration of the mortgage.
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