Good morning, I have a mortgage with the bank for €85,000 at a variable rate with a residual duration of 9 years. The bank does not want to proceed with the renegotiation to extend the duration and lower the installment also switching from variable to fixed rate, can they do it? How can I assert my rights and obtain a more acceptable instalment?
Mortgage renegotiation is an agreement between the customer and the bank to change some conditions of the existing mortgage, such as the interest rate, duration, or type of rate (from variable to fixed or vice versa). Renegotiation is, however, at the discretion of the bank, and is not an automatic right of the customer. Therefore, if the bank does not want to renegotiate the mortgage, it is free to make this decision. Mortgage subrogation is an option you can consider to improve the conditions of your mortgage without having to renegotiate directly with your current bank. With subrogation, you can transfer your mortgage to another bank that offers better conditions, reducing the monthly payment. Based on Law 197/2022 (Budget Law 2023), there is the possibility of requesting renegotiation of the mortgage to switch from a variable rate to a fixed rate, but some conditions must be met:
- the amount of the original mortgage must have not exceeded 200,000 euros;
- the loan must have been stipulated for the purchase, construction, or renovation of the first home;
- the borrower’s income must be less than 35,000 euros per year;
- there must be no delays in mortgage payments.
Another option is to attempt a mediation agreement. You can turn to a mediation body or a financial banking arbitrator (ABF), which is a body that can intervene in conflicts between banks and customers. Mediation can lead to a negotiation between you and the bank, with the aim of finding a solution that is beneficial to both parties.
