The first thing to explain is that there are different types of mortgage subrogation and a different fee in each case
Borrowers are sometimes approached by another entity offering them more competitive fees so they decide to improve the terms and conditions of their existing mortgage by moving it to the other bank.
Subrogation between individuals (debtor)
Subrogation between individuals consists in substituting one borrower for another. This is common practice when someone is interested in buying a mortgaged property and they take over the seller's mortgage. The transaction takes place when the sale is formalised.
Mortgage subrogation fees or penalties
Unlike other amendments, subrogation protects the customer because they don't have to pay any new taxes. However, if the subrogation consists in moving the mortgage to another entity (creditor subrogation), the bank will charge a fee for this transaction.