How to switch from a variable rate mortgage to a fixed rate one with the new 2023 Budget law

Given the important thing increase in interest rates on mortgages occurred in recent months, the 2023 Budget law provides for a simplified procedure for the transition from a variable rate mortgage to a fixed rate one, relatively more convenient today. In addition to the possibility of renegotiation, subrogation and replacement, there is therefore the possibility of renegotiating the loan with your bank by changing the rate at no additional cost. Here’s how.

Renegotiate the mortgage from variable to fixed with the 2023 Budget law

The 2023 Budget law provides for the possibility, until the end of 2023, of switching from a variable-rate mortgage to a fixed-rate one at no cost, provided that certain conditions are met:

• loan of less than 200 thousand euros
• isee of the borrower not exceeding 35 thousand euros
• borrower never late with payments

This is a solution that re-proposes what was already foreseen in 2012 by the government.

Change mortgage from variable to fixed: other methods

There are also other methods to change your mortgage, should it be difficult to meet the installments: here are which:

Renegotiate the mortgage

The first way to change your mortgage, for example from a variable rate mortgage to a fixed rate one, is to renegotiate the mortgage. This operation, which is free, with no amount limits and can be repeated an unlimited number of times, consists in changing the conditions of your loan without changing banks. It is the simplest procedure: just contact the bank with which we have contracted our loan and propose the operation. Obviously, asking is not getting: the bank could assess that the conditions for adhering to the request do not exist.

Subrogate the mortgage

There loan subrogation it is the second way to change a mortgage without costs; through this procedure it is possible to change the conditions of the contract, including the bank with which we stipulate it. With the subrogation, the loan is transferred to another bank, which will be able to apply different and better conditions, maintaining the loan amount. In this case the new bank takes charge of the contract, without charges for the customer, paying off the loan at the old bank in his place.

Replace the mortgage

A third way to change your mortgage by paying off the old one and then requesting the disbursement of a totally new loan is the loan replacement. In this way the contract is completely rewritten with new rates, new duration, new amounts. In this case there are costs to be incurred, such as those of the new notarial deed, to be paid by the borrower, with related preliminary investigation, appraisal and insurance costs.

Renegotiating the mortgage, what changes with the 2023 Budget law

Considering that the loan renegotiation it is a practice that has already been foreseen, and already free, for some time, in theory the 2023 Budget law does not introduce any important innovations in this sense; however, the fact that specific requirements are being introduced in the new Budget law suggests that, if these are met, the requests cannot be rejected by the banks, as sometimes happens. However, we are still waiting for specific operating guidelines as regards the new renegotiation of the mortgage from variable to fixed rate, in particular as regards the recalculation of the amount of the renegotiated mortgage.

Renegotiate your mortgage, how much you can save

According to Altroconsumo, a borrower with a variable rate mortgage stipulated in 2019 today could hypothetically have a residual amount of 150 thousand euros to be repaid over 22 years with a one-month Euribor rate plus a spread of 1.5 percent. For a total rate of 3.3 per cent, the installment would amount to just under 800 euros per month, but which could increase in the future; switching to a fixed rate, at current rates, a constant installment of 870 euros would be incurred for the entire duration of the loan.