Early repayment fees on a Spanish mortgage: the legal caps

The right to repay

Article 23.1: “El prestatario podrá en cualquier momento anterior a la expiración del término pactado reembolsar de forma anticipada total o parcialmente la cantidad adeudada.” The contract may require prior notice, which “no podrá exceder de un mes”. When you say you want to repay, the lender must give you in writing or on another durable medium, within three working days (días hábiles), the information needed to assess the option, quantifying the consequences and stating the assumptions used (art. 23.2). Those assumptions must be reasonable and justifiable.

You are entitled to a reduction in the total cost of the loan, “los intereses y los costes correspondientes al plazo que quedase por transcurrir” (art. 23.3). An insurance policy accessory to the loan whose beneficiary is the lender ends, unless you tell the insurer expressly that you want it to continue and name a new beneficiary; you are entitled to a refund of the unused premium (art. 23.3).

The caps, with the text

General rule (art. 23.4). The lender “no podrá cobrar compensación o comisión por reembolso o amortización anticipada total o parcial” except in the three cases below.

Variable rate, or the variable tranches of other loans (art. 23.5). The parties may agree one of two mutually exclusive options:

• repayment in the first 5 years: a compensation not exceeding the lender’s financial loss, “con el límite del 0,15 por ciento del capital reembolsado anticipadamente”; or
• repayment in the first 3 years: not exceeding the financial loss, “con el límite del 0,25 por ciento del capital reembolsado anticipadamente”.

Switch from variable to fixed (art. 23.6). In case of a change of the applicable rate or a subrogation of a third party in the creditor’s rights that brings, for the rest of the contract, a fixed rate or a first fixed period of at least 3 years in place of a variable one, the charge cannot exceed the financial loss, “con el límite del 0,05 por ciento del capital reembolsado anticipadamente, durante los 3 primeros años”. If no capital is repaid in the change, no charge may be made. After the first three years the lender “no podrá exigir compensación o comisión alguna”. The BOE notes that this paragraph was modified by Real Decreto-ley 19/2022 and Real Decreto-ley 8/2023.

Fixed rate, or fixed tranches (art. 23.7).

• the first 10 years of the contract or from the day the fixed rate applies: financial loss, capped at “el 2 por ciento del capital reembolsado anticipadamente”;
• from the end of that period to the end of the loan: financial loss, capped at “el 1,5 por ciento”.

How the financial loss is computed (art. 23.8). It is calculated in proportion to the capital repaid, as the negative difference between the outstanding capital at the time of repayment and the present market value of the loan. That value is the present value of the instalments until the next rate revision plus the present value of the capital that would remain at the revision. The contract must name the reference rate used for the calculation.

Calculations

These examples apply the official percentages to round figures I chose; they are not quotes.

• Repaying €50,000 of a variable loan in year 2 under the 0.25% option: at most €125.
• Repaying €50,000 under the 0.15% option, in year 4: at most €75.
• Repaying €50,000 of a fixed loan in year 6: at most €1,000; in year 12, at most €750.
• A capital repayment of €50,000 during the change to fixed in year 2: at most €25.

In each case the actual charge is the lower of the cap and the lender’s financial loss; the cap alone does not tell you what you owe.

The suspension that ended

Real Decreto-ley 8/2023, additional provision 1, provided that until 31 December 2024 no compensation or commission would be charged on early repayment of variable-rate mortgages in the cases of article 23.5 and 23.6, nor any commission for converting to fixed. That period is over, and the consolidated text of article 23 I read shows no extension. The BOE consolidated page still carries a note about the suspension under article 23; it records history and does not mean the suspension is current.

Which professional to consult

Ask your lender for the written information required by article 23.2 and have the figures checked against your contract. A lawyer registered with a Spanish bar association (colegio de abogados) can read the clause; see property lawyers. For a switch to another lender, see mortgage lenders.