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INCREASING YOUR MORTGAGE

How to increase your mortgage.

You have already been paying your mortgage payments for years and you still have a few left. But your circumstances or needs have changed since the day you bought the house. Do you remember? Things can change for you now, and luckily it might be possible to tailor your mortgage to you.
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If life changes, your mortgage can too

  • If an unforeseen event crops up and you need to lower your payments a bit.
  • Or it is time to get on with that renovation project and you need the funds.
  • If you have saved up and are thinking of a second home.
  • Or you want to start a new project that requires an investment.
  • Or you realise that, for that extra money, it is better than a personal loan.

What can you extend in your mortgage?

Increasing the mortgage amount

It can be the solution for you if you need to buy a second home or a specific amount for a renovation or other project, because it's got to be better than a personal loan. But do your maths, bearing in mind that, with the new amount, the monthly fee will be recalculated and the interest will increase.

Extending the mortgage term

Ideal if, due a change in circumstance, what you need is to reduce what you pay each month. Of course, you should be aware that by increasing the repayment period, the payable interest may be higher in the long run.

And both things

It's not that you're selfish; increasing the amount and term of your mortgage will give you more liquidity to cover new needs, without your monthly payment going up or down significantly.

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You want to, but can you? How to know whether you can extend your mortgage or not.

There are some requirements and conditions that will be studied and verified before your loan extension is approved. You can take a look at it and if you have any questions, it is best to speak directly to your bank about your current needs and how to best deal with them.
  • You must be up-to-date with your payments.
  • You must be financially healthy. Owning debt or other loans can be major obstacle.
  • Your employment situation or your income must remain stable.
  • The total term and your age at the end of the repayment period must be those agreed with the bank.

Your mortgage is like it is brand new and, of course, there are new procedures and expenses.

As you can see, extending your mortgage is an option and it can be better for you and your pocket than asking for a new loan. Even so, making changes to your mortgage loan involves new arrangements and consequently new expenses. We recommend you always keep them in mind when you are punching in numbers on the calculator.
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  • Notarisation, processing and land registration. When changes are agreed to the mortgage, a new public deed needs to be drawn up.

  • Mortgage novation fee. This is a percentage of the outstanding amount and the new amount that you want to include.

  • Stamp duty (IAJD). You only pay this if you decide to increase the principal. It varies a bit because it depends on each autonomous community. In any case, Bankinter assumes this expense.

  • New appraisal of the house. A new appraisal is usually requested a while after the previous one.

There are some essential questions and some clear answers