Mortgage Subrogation

t is a modification of one of the factors of the mortgage, whether from the debtor or the creditor. If it is from the debtor, it involves changing the mortgage loan holder. This is the most common case when purchasing a property that already has an existing mortgage.

The bank will carry out a financial assessment, as if it were a new mortgage loan application. Once the modification is approved by the bank, we will save on the taxes related to the mortgage, but we will still have to pay for expenses such as: notary fees, administrative fees, registration, and a subrogation fee that was already specified in the initial mortgage loan contract.

Another case is the subrogation between banks, which consists of transferring our mortgage from one bank to another with the aim of improving the loan terms.

In this case, we will also incur notary fees, administrative fees, registration, and the subrogation fee, which must currently be lower than 0.5% for operations formalized after April 2003.

Finally, we have the scenario of purchasing a newly built property. It is common for the builder to have taken out a mortgage to finance the construction through their bank. In this case, the buyer can choose to either take on the existing mortgage or not. If we choose not to keep the existing mortgage, the builder will cover the costs of mortgage cancellation.

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