10/08/2021 at 12:46 AM CEST
Both operations allow modifying the initial conditions for which a mortgage loan is signed. Yes, they both have similarities but they are not exactly the same so it is important that you know them in case you have to choose between one or the other.
The novation of a mortgage is the modification of the initial conditions at the time of signing the mortgage. The novation makes the mortgaged person able to renegotiate the conditions of their mortgage acceding in more favorable conditions economically.
In order for the novation to be carried out, the bank must study the particular case and approve the changes. The most common are usually: Outstanding amount of the mortgage, repayment term, interest rate, change of mortgage holder.
Subrogation of a mortgage allows you to make changes to it. Of course, the change occurs because subrogation consists of changing the mortgage from one entity to another (or to a new owner). Therefore, the debt contracted with one bank passes to another.
From that moment, the payments that have to do with the mortgage will have to be made in the new entity that has accepted the subrogation of the mortgage. I mean, we need a third actor to subrogate the mortgage loan.