jerome1978 23 August 2019 Real estate news in Spain no responses

Keys to Understanding the New Mortgage Law



keys to understanding the new Mortgage lawOn 17 June, the Law on the Regulation of Real Estate Credit Contracts came into force as the Mortgage Law, whose ultimate objective is to protect the consumer from the banking misconduct that has been taking place in recent years, in the field of loans and loans granted for the purchase of a home. 


These are the main keys of the new Law:

  • To begin with there will be greater transparency regarding the information given to the client, so that financial institutions have to give all the necessary information, at least 10 calendar days before the signing of the mortgage, for the mortgaged future can understand the terms of credit.

  • The bank will have to dump the terms of the loans on the technological platform of notaries, giving them more prominence, since it will be the notary who must certify that the banks comply with their obligations and that customers understand the mortgage conditions.

This information must be provided by the notary free of charge, carrying out an comprehension test to the citizen and reflecting all this information in a notarized minutes.

  • Disappearance of the floor clauses of mortgages. As well as a prohibition of ties, no bank may require any customer to take out insurance or other product as a condition of being granted the mortgage.

  • The bank shall bear the payment of the tax of Documented Legal Acts (AJD), as well as the first copies of the notary, the costs of registration and the costs of management.

On the other hand, customers will have to pay the appraisal fees and the second copies of the notary.

  • The conditions of subrogation of mortgages are facilitated, i.e. to be able to switch from one bank to another, with the elimination of the subrogation fee that previously ranged from 0.25% to 1%.

With these changes, customers will know what their rights and obligations are, reducing the possibility of legal disputes in the future.