Summary
What does it mean to cancel a mortgage?
Just as some days are tough, others fill our minds with pure joy; and yes, one of those days is the day we paid off our mortgage. Finally!However, there is a very common misconception here: thinking that finishing paying off the mortgage means that the mortgage automatically disappears, like when we finish paying for an armchair in installments and when the last payment arrives, we forget about it.
But no, let's not mix apples and oranges.
We need to distinguish between two things. On the one hand, what we consider the settlement of the debt with the bank. On the other, cancelling the mortgage in the Property Registry.
Until you complete this process, the property will continue to appear as mortgaged in the land registry. This can cause problems if you want to sell, inherit, or obtain new financing.
Therefore, cancelling a mortgage involves two steps:
- Paying off the mortgage loan in full (something not to be underestimated).
- Perform the registration cancellation of the mortgage.
Breakdown and table of expenses for cancelling a mortgage registered in the land registry
| Concept | Is it mandatory? | Approximate cost |
| Zero Debt Certificate | Yeah | Free |
| Notary | Yeah | From €90 |
| Property Registry | Yeah | From €24 |
| Management services | No | €150 - €400 |
| Early cancellation fee | It depends on the mortgage | Variable |
In terms of expenses, let's list the most common costs associated with cancelling a mortgage. These are the ones you're guaranteed to encounter:
As we mentioned before, the total cost is usually between €400-€1000 depending on whether you delegate all the procedures.
However, if you take the plunge and decide to do it yourself, the price is significantly reduced.
The zero debt certificate
Ah, that long-awaited document! Once you've paid off your mortgage, the bank must issue what's called a zero-debt certificate. This document proves that you no longer owe anything and is essential for the property's registration cancellation.In addition, the bank does not charge you for issuing it.
Once you have it, the process follows these steps:
- The bank sends a representative to the notary to sign the cancellation deed.
- You obtain the notarized deed of cancellation (cost from €90).
- Submit the deed to the Property Registry (cost from €24).
- The property is registered as free of encumbrances.
After that, you have to take it to the Land Registry to officially remove the lien.
If you want to better understand how the whole process works, you can find more information about mortgage release here.
Expenses for cancelling a mortgage
Notary fees: how much does the notary charge
The cancellation of a mortgage must be formalized through a public deed. In other words, you need to go to a notary's office.The price is regulated by law, so it doesn't depend on how "expensive" the notary is. Although it can vary slightly depending on the mortgage amount and the number of pages in the deed, the minimum cost is usually around €90.
Property Registry fees.
Have you already signed at the notary's office? Now it's time to take the next step: registering the cancellation. This step ensures the property is officially free of encumbrances.And while many people put it off, doing it sooner usually prevents future problems. Especially if you want to sell the house or use it as collateral in another transaction.
Registration fees are also regulated by law and usually start at around €24.
Management fees: is it worth hiring one?
At this point we start from the beginning: no, it is not mandatory to hire one.You can take care of transporting the documentation between the bank, notary and registry yourself.
However, between schedules, paperwork, and travel, it's not always worth it. Every situation is different, and no one knows better than you what to do.
The cost of this procedure is usually between €150 and €400 depending on the agency you choose and also on the complexity of the operation.
Tip of the day: If the bank suggests a specific management company, compare prices before accepting.
Early cancellation fee: How much can the bank charge you?
This is where many people are surprised because, if you pay off your mortgage before the agreed term, the bank can apply an early repayment fee. However, as we've seen in the previous sections, this fee is limited by law.
For variable-rate mortgages signed after June 16, 2019, the maximum commission is:
| Type of mortgage | Period | Maximum legal commission |
| Variable (post June 2019) | First 3 years | 0.25% |
| Variable (post June 2019) | First 5 years | 0.15% |
| Variable (post June 2019) | Rest of life | 0% |
| Fixed (post June 2019) | First 10 years | 2% |
| Fixed (post June 2019) | Rest of life | 1.5% |
| Mixed | Variable depending on the segment | Just as fixed or variable depending on the period |
In many current mortgages, this fee is not included, but it is always advisable to review the deed before making any decisions.
And note: if the bank only issues the zero debt certificate or sends a representative to the notary, it cannot charge you additional fees for it.
Is it possible to avoid mortgage cancellation fees?
It depends. If you're going to sell your mortgaged home to buy another one, there's an interesting alternative: debtor subrogation.Since we imagine you're wondering what debtor subrogation is, we'll explain that it's as simple as the buyer taking over the existing mortgage.
Like the game of hot potato we played as children, in this case, you are the one who passes it.
This way, you avoid having to officially cancel the mortgage and can reduce some of the associated costs.
Furthermore, many people take advantage of this time to move and secure new financing tailored to their situation. This is because it's not uncommon for someone wanting to pay off their mortgage to be embarking on a new chapter with a larger house, a move, a second home, or even a self-built property.
And that's where good financing makes all the difference again.
What if you want to improve your mortgage?
It's also possible that you don't want to sell. You're simply looking to pay less. In that case, you have two options:- To perform a mortgage subrogation and change the mortgage bank.
- Cancel the current mortgage and take out a new one.
It all depends on numbers, deadlines, and objectives.
Frequently Asked Questions
Is it mandatory to register the cancellation of the mortgage in the Property Registry?
It is not required by law, but it is highly recommended.If you don't do this, the property will continue to appear as mortgaged in the land registry even if you have finished paying off the loan.
And that can complicate a future sale, an inheritance, or obtaining new financing.
Who pays the cancellation fees if the property is sold?
Normally, the seller. Especially when they need to cancel the mortgage to transfer the property free of encumbrances.Although in some specific transactions the buyer and seller may agree on a different distribution of expenses.
How long does it take to cancel a mortgage?
It depends on whether you do the paperwork yourself or through a management agency.The entire process usually takes between two and six weeks.
Can I cancel my mortgage myself without a management company?
Yes. The reality is that there is no obligation to hire a management company or to accept the one provided by the bank.If you have the time and want to save costs, you can do most of the paperwork yourself.
Now, if you want to make the decision, you already have the most important thing: all the information.
And if you need to resolve any further doubts, you can always count on us.
