The Loan Change: Renegotiation, Subrogation, Replacement


The Loan Change

The Loan Change

The decision to adopt a loan change is taken by the consumer when he considers that the conditions to which the loan is subjected are no longer sustainable. A mortgage constitutes a significant financial commitment, which continues for many years and whose conditions may change, especially if the contract provides for a variable interest rate. However, the Italian legislation provides for certain rules to protect the consumer, which can go in search of more favorable conditions in other financial institutions or even in the same bank that granted the loan.

Of particular interest, due to its relative simplicity and the possibility of not changing banks, is the renegotiation of the loan. With this operation, the user can ask his bank without any additional cost for a revision of the conditions set by the contract. These may relate to the duration of the loan and the type of interest rate initially envisaged. As for the duration, it is usually required an extension of the expiry of the repayment period, so that the installments are lighter.

Regarding the interest rate, the options available to the consumer depend on what type of contract has been chosen. In fact, a fixed-rate mortgage provides that the interest is pre-established at the time the contract is stipulated. However, if the consumer believes that they are excessively high, perhaps because they are higher than the reference rates, he may request a renegotiation towards a variable rate.

If instead a variable rate was originally chosen, a first choice concerns the spread imposed by the contract with respect to the reference rates: variable rate mortgages in fact provide for interests that vary according to the trend of international and national reference rates. Compared to these rates, the rate fixed for the mortgage is higher than a certain amount, called the spread, which can be modified. Otherwise, you can always renegotiate, even with a simple private deed, and switch to a fixed rate.

Switching to another bank, on the other hand, two possibilities for changing the loan are:

  1. the replacement, which provides for the termination of the loan to open a new one with another banking operator. It foresees a new passage by the notary (with related expenses) and all the expenses related to the opening of a new contract;
  2. the subrogation, ie the transfer of the current loan to another institution, after the payment of a mortgage fee of 35 euros charged to the borrower and a public deed sanctioning the passage, whose expenses are instead borne by the new bank.