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New mortgage law 15 march 2019

After more than three years of brooding under pressure from the European Union, the Spanish government ratified the new mortgage law (Ley 5/2019, the 15 de marzo), which protects consumers not only against incompetent advisors, intermediaries and financing for a (second) home in Spain. Below we list the most important points, as a follow-up to the previous article ‘The new mortgage law in preparation’.

1. Clausula suelo
This clause has been completely deleted. There is no longer a minimum or maximum interest rate. However, the banks will not pay negative interest if the Euribor is negative.

2. Claim mortgage in the event of non-payment
The period for claiming the mortgage in the event of non-payment is relaxed in the interest of the consumer. In this way, the consumer is given a better chance to recover, for example after a personal financial crisis.

3. Mortgage establishment costs
The change that can be felt directly in the wallet relates to the costs for establishing the mortgage. These are now paid by the bank. The appraisal costs and bank costs (closing commission) are the only costs that are still paid by the consumer.
The establishment of a Spanish mortgage has become a lot cheaper for the consumer as a result of this legislative amendment.
4. Early repayment
The early repayment of the Spanish mortgage has also become cheaper. With fixed interest, the penalty interest is two percent for early repayment during the first 10 years, after which the penalty interest becomes one and a half percent.

In the case of variable interest, the maximum permitted penalty interest is one quarter percent for early repayment during the first three years, after which the penalty may not exceed one and a half percent.

5. Changing mortgage terms
Changing the mortgage terms and conditions has also become cheaper, namely 0.15 percent. For example, converting variable interest into fixed interest (or vice versa).

6. Notary process mortgage settlement
In short, it means that the mortgage offer must be signed with the notary together with filling in a questionnaire to protect the consumer. The mortgage deed will be able to pass ten days later.