Canceling mortgages in the Property Registry: reducing notary and management costs.

Over the past five years, about 345,000 home mortgages have been canceled. Buying a house and getting the keys is the dream of many people in our country. However, the high cost of homes for sale makes such a significant investment out of reach for most, as it easily exceeds hundreds of thousands of euros and can even approach a million. Therefore, three quarters of buyers need a mortgage to finance the purchase of their home, according to an analysis by the real estate portal Fotocasa.

"A mortgage loan allows us to have a significant amount of money, usually to buy or renovate a home," say from the Bank of Spain (BdE). This loan is offered by the banking institution in lieu of loan repayment and interest.

Finishing a mortgage is every homeowner's dream as the debt to the bank will be paid off after many years. Although it is not mandatory, many people do not know that once the last payment on the loan has been paid, the mortgage must be canceled at the Registry Office. Some 345,000 home mortgages have been canceled registrably over the past five years, and between January and August 2023 that number is already over 298,000, according to the National Institute of Statistics (INE).

"Not everyone knows that after the financial settlement of the mortgage with the bank, it still remains in the registry; and many of those who know this do not cancel it registrably because they want to save on costs," says an attorney from the law firm Marín & Mateo Abogados, Elizabeth Durán.

Owners who cancel their mortgage due to the expiration of the statute of limitations, however, will only have to face "a small amount of registration fees." "The regulations stipulate that 20 years must elapse, plus one year from the date of the statute of limitations on the last payment on the mortgage loan," Duran comments.

After these 21 years, no notarial deed will be required and the owner simply needs to fill out a "very simple" online form and go to the Registration Office with identification, thus saving on notary and accounting costs, the attorney states.

Registration revocation will be necessary if the home is sold or transferred to children. And Duran recognizes that "the buyer who becomes the new homeowner or the heirs should make sure that there are no existing encumbrances and no claims by the bank. "

If you want to cancel your mortgage before the statute of limitations expires, you should ask the bank that issued the loan for proof that there are no debts owed. In addition, it will also be necessary to request and complete a document for the registration of acts of a legal nature with the relevant regional delegation. This management can be done by the owners themselves, as well as registration and notary fees, because if it is done through a bank, it charges a service fee.