Interest rates provided for in variable and mixed-rate mortgage deeds, and which will only apply in cases where the initially agreed benchmark rate ceases to exist.

Person who receives a sum of money and has the obligation to return it, along with the agreed interest, after a set period of time.

Replacement of initial borrowers by a new one. For borrower subrogation to take place, the financial entity has to accept the change in borrowers.

The objective value of a property set by the authorities of the municipality (Town Council) where the property is located by applying certain valuation criteria. As a rule of thumb, the cadastral value cannot exceed the property’s market value. The cadastral value is the taxable base used for calculating Property Tax (IBI). Cadastral values may be updated annually by the Town Council.

Elimination of the entry of the charge that is included on an estate in the Property Registry. A mortgage loan can be completely paid off, but the mortgage still features in the Registry. For that mortgage to disappear, a cancellation deed has to be signed and subsequently entered into the Registry, invalidating the charge it refers to.

When the interest agreed in the contract, which is accrued and unpaid, is added to the outstanding loan capital, thus giving rise to further interest.

Document authenticated and issued by the Property Register stating whether the property has any encumbrances.

Generic term used to refer to a notary public or other public officer that can certify public instruments.

Amounts, other than interest, that credit institutions charge customers for their services

Stands for Central de Información de Riesgos del Banco de España (Central Credit Register of the Bank of Spain), and is a public service that keeps a record of practically all of the loans, credits, guarantees and risks that financial institutions have with their clients.

Agreement or arrangement, oral or written, between parties who are mutually obliged with regards certain subject or item, and whose fulfilment can be obliged.

The person or entity to whom money is owed.

This occurs when the borrower (mortgage holder) switches their loan to another financial institution, without having to repay the existing loan and set up a new one. Before it can take place, the debtor and the new financial institution must agree to the transaction.

Law to safeguard and guarantee the fundamental rights and freedoms of natural persons where data processing is concerned, and particularly their right to honour and to personal and family privacy.

Refers to the situation where the creditor waives their right to recover a debt, which leads to the total or partial cancellation of the debt obligation.

This is when one mortgage holder (borrower) is replaced by another. It usually occurs when a person purchases a home that is already mortgaged and the new owner becomes the new loan debtor. Before it can take place, the financial institution must agree to the change of borrowers.

A public instrument witnessed and signed by a notary public attesting to the content and thus allowing it to be registered with the Property Register.

Delay in meeting repayment commitments.

Amount paid as a result of any delay in making the loan repayments.

It is the amount of money that the buyer gives to the seller as a guarantee that he will buy the house according to the conditions agreed prior to the signing of the mortgage.

It is the amount of money that the buyer gives to the seller as a guarantee that he will buy the house according to the conditions agreed prior to the signing of the mortgage.

A tax levied on documents executed as deeds, which are registrable and require the payment of stamp duty, such as deeds of sale and mortgages.

An amount of money the buyer of a property contributes to the purchase, not including the money borrowed from a third party.

Public deed.

Refers to the gradual accessing of funds from the line of credit that the bank extends to the customer.

When the debtor repays the loan in full before its maturity date, paying the lender the outstanding capital and the interest accrued up to the time of redemption. Consequently, the relationship between the borrower and lender is terminated.

An amount of money towards the final price of the property that the buyer gives to the seller as a guarantee that the sale will go through before a given date. If the buyer withdraws before that date, they will lose this money.

Limitations on the ownership of a property or in connection with the payment of a debt. They must be registered with the Property Register.

Each of the registrations that the registrar makes in the Property Registry with regard to the lifetime of a property.

Term used to allocate a property in the Property Registry.

Acronym for ‘European Interbank Offered Rate,’ it is the interest rate at which the main financial institutions lend money to each another on the interbank market. One-year Euribor is the most widely used benchmark rate for variable rate loans, and is published monthly by the Bank of Spain.

Document that includes the personalised information of the loan requested. This document allows the borrower to evaluate the terms and conditions offered and compare them, so that they can make the decision that is right for them. The FEIN is considered to be a binding offer from the Entity for a period of at least ten days.

This document sets out the most important terms and conditions of the loan.

An amount of money lent. For the purchase of a home, it is usually between 70% and 80% of the property value.

The term used to designate a property in the Spanish Property Register. Each house is referred to as a finca registral.

First registration of a property in the Property Register. When a property is registered for the first time, a registration page is opened and it is assigned a property number.

A loan where the nominal interest rate does not change during the term of the loan, irrespective of variations in the mortgage market.

The contract usually provides that in the event of defaults on the mortgage repayments by the debtor, the lender may declare the loan due and try to recover the defaulted debt and principal by auctioning the mortgaged property. Foreclosure proceedings may be initiated if the debtor is 12 months in arrears with the mortgage repayments (during the first half of the mortgage term) or 15 months (during the second half).

It is the payment system based on constant installments in which the initial installments concentrate a higher interest payment as opposed to the final installments which concentrate a higher amortization payment.

Periodicity with which the interest rate is changed for variable-rate loans.

Period of the loan during which neither interest nor principal are paid.

The assurance of a third party, who pledges to pay the loan in the event that the borrower cannot.

Person who acts as guarantor for a loan and assumes the borrower’s payment obligations if the borrower fails to pay the principal and/or interest. They are liable with all of their present and future assets.

Tax on a public document (notary deed) that is registered and for an economic sum.

Tax on the ownership of an estate.

This refers to a property that cannot be divided.

An amount that the mortgage holder(s) undertake to pay the lender at regular intervals and which is intended to pay off the monthly interest and part of the principal.

An amount paid as remuneration for the use of money lent.

An additional percentage charged on the outstanding balance of a loan and proportional to the days of delay in payment.

A percentage applied to the outstanding loan capital to calculate the interest that the borrower has to pay.

Frequency at which the interest rate of the variable interest loan is modified.

Period of the loan during which only interest is paid and no principal is repaid.

Period of the loan in which a lower repayment is made.

In variable-rate loans, this is the percentage added to the benchmark interest rate at each interest rate review.

The Mortgage Loan Reference Index or IPRH is a reference indicator used to update the interest rate of variable mortgages. It is calculated as the average rate of mortgage loans for more than three years granted by banks and savings banks.

Tax on second and subsequent transfers of equity that involve an exchange of assets.

Tax on the first conveyance of property. In the Canary Islands this tax is replaced by the General Indirect Canary Islands Tax (IGIC).

It is a registry where data related to a property is stored, such as the characteristics of its owners and of the property.

The person who gives money to another person, called the borrower, who has to return this amount along with interest.

This occurs when the borrower (loan holder) takes their loan to another entity, converting it without cancelling the existing loan. For lender subrogation to take place, the debtor and new financial entity have to agree.

A claim or legal right against a property.

In variable-rate loans, this is the percentage added to the benchmark interest rate at each interest rate review to obtain the new interest rate to apply.

This is when a debt becomes due and payable.

Draft used to draw up a notarial instrument.

Loan for which there is an initial fixed rate period agreed and then the remainder is at a variable rate.

This is the amount that the holder(s) of a loan undertakes to regularly pay for the loan.

A right in rem established to guarantee the performance of contractual obligations to a third party (loans, bills of exchange). Along with payment of the principal, it guarantees payment of ordinary interest, default interest and the costs and expenses arising from legal claims in the event of non-payment. Though not exclusively, mortgages are typically used to purchase immovable property. They are concluded in a public instrument and the rights are constituted upon registration of the mortgage with the Property Register.

Person obliged to satisfy a debt with all of their present and future assets.

Person obligated to repay a debt with all of their present and future assets.

The sum of all items secured by a mortgage (the loan capital, ordinary interest, interest on arrears and legal costs and expenses).

A sum of money granted, generally by a financial institution, to a natural or legal person which is secured with immovable property.

Person who accepts the mortgaging of a property asset they own in guarantee of the payment of a personal or external loan.

The right of an individual (the naked owner) over a property or asset which they own but which they do not have full rights to, given that another person has the limited right to use and enjoy the property (the usufruct).

This is a number issued to foreigners who have been in Spain for more than 3 months. It is issued by the national police and is necessary to carry out various processes in Spain such as buying a house or signing a mortgage.

A financial term that can be defined as the interest rate that indicates the cost or effective yield of a financial product during the term established for the operation.

Unlike the mortgagor and borrower, the non-debtor mortgagor is not obligated to make payment if the borrower defaults on their loan obligation, and their liability does not extend to all of their assets, but merely to the asset given as collateral against the loan.

It is a document issued by the Land Registry that indicates certain characteristics of the property such as the ownership of the same one and the possible existing loads. It allows the buyer to make sure that the information provided by the seller is authentic.It is a document issued by the Land Registry that indicates certain characteristics of the property such as the ownership of the same one and the possible existing loads. It allows the buyer to make sure that the information provided by the seller is authentic.

Civil servant who authorises and certifies the contents of certain acts and legal business (sale contracts, mortgage contracts...)

Consists of changing any of the terms of the loan initially agreed with the entity.

The value used as a basis for calculating the interest rate in variable-rate loans when reviewing the interest rate. It is obtained and published on a monthly basis by the Bank of Spain and published in the Official State Gazette (BOE). The most widely used benchmark rates are the Mortgage Loan Reference Index (IRPH, by its Spanish acronym) and one-year Euribor.

An amount paid when the mortgage deed is signed in consideration of the services rendered for the arrangement and provision of the loan. It is usually a percentage of the capital lent.

The amount of the loan that still needs to be repaid.

A way of partially or completely extinguishing a debt in which the debtor gives the mortgaged asset to the creditor.

Sum of money that the buyer of a property allocates to its acquisition, with the exception of the amount obtained with external financing.

Amount of money granted by an entity or a legal or natural person, which is not guaranteed by anything other than the borrowers’ guarantee.

Municipal tax on the increase in land value. Also known as capital gains tax. By law, the seller is the person liable for the tax, unless agreed to the contrary, in which case it must be reflected in the public deed of sale. The amount of this tax depends on various factors.

It is a document endorsed by a notary to authorise a person to act on one's behalf.

In insurance, this is the amount of money the policyholder pays the insurance company to cover against future, uncertain acts or events called insured events.

This is the nominal amount of a loan or the outstanding amount to be paid off or returned.

Contract or agreement that contains the will of the parties and is signed without the intervention of a notary or attesting official. Private contracts are not registered in the Property Registry.

A company that arranges the deeds of sale and mortgage loan and their registration with the Property Register.

Document issued by the administrator of the Property Owners Association outlining the debt situation of the current owner with the Association.

It is the amount of money that the financial institution will lend to the customer to purchase a property.

Public office where documents relating to properties and rights in rem in immovable property are registered. These documents may be disclosed to the public through the Register.

A document issued by the Property Register stating whether the property has any encumbrances.

The amount of money handed over in advance to cover specific expenses, the exact amount of which is unknown. Once the invoices have been obtained, the funds provided will be settled.

Person who is empowered to represent another and act on their behalf.

A document setting out the will of the person executing it and which is witnessed by a notary public, thus allowing it to be registered with the Property Register.

In variable loans, a review takes place when the interest rate applied changes. It is calculated by adding a margin to the benchmark rate. The review frequency is agreed by the parties.

The amount of the loan returned early. It can be totally or partially.

This is a fee charged by the financial institution in the event of repaying the mortgage before the agreed term.

Each of the annotations entered into the Property Registry.

The registration stating that there is a mortgage on the property is removed from the Property Register. A mortgage loan may have been fully repaid but still appear in the Register. To have the mortgage removed from the Register, a deed of release must be signed and then registered with the Register to release the lien on the property.

Part or full repayment of a debt.

An amount of the loan capital which is repaid early. It may be repaid in part or in full and is usually subject to a commission charge.

There are different types of repayment systems but the most commonly used in Spain is the ‘fixed instalment’ or ‘French repayment system’. In this system, the instalments to be paid at the agreed frequency (monthly, quarterly, etc.) do not change throughout the life of the loan when it is a fixed-rate loan. In variable-rate loans, the instalment is a fixed amount for the duration of the interest rate period, but will change on the date the interest rate is reviewed and will then remain at that amount until the next review.

This is a contract signed between the buyer and the seller that commits both parties to the sale and purchase of the property.

It is the fee to be paid by the owners of properties located in a building. They allow to face the expenses of the community of neighbors (electricity, water, cleaning, repairs, etc.).

An amount of money advanced to cover certain costs, the amount of which is unknown at that point in time. When the invoices are issued, the retainer is settled.

Financial institutions may charge a fee in cases where a buyer (with the approval of the bank) decides to take over the existing mortgage on the property they intend to purchase.

An obligation assumed by a person to perform another person’s obligations should the latter fail to do so. The contracting party provides this as a guarantee that the obligation will be performed.

Interest rate which indicates the cost or effective performance of a financial product. The APR includes bank charges and expenses, unlike the interest rate.

This is the period during which mortgage payments will be made.

Document that certifies the ownership of an estate and which describes the date and way in which it was acquired, as well as its main characteristics.

A property is said to be unencumbered when there are no ownership limitations on it. In other words, it is free and clear of any encumbrances such as mortgages, liens, usufructs or other restrictions.

The right of an individual, known as the usufructuary or beneficial owner, to use and enjoy a property owned by another person, known as the naked owner. In the case of a dwelling, the usufructuary is entitled to live in a house belonging to the naked owner. The right of usufruct expires upon the death of the usufructuary.

This is the estimated value of a property, depending on its condition, location or comparison of prices on the market, among other items. Valuations can be made by companies certified by the Bank of Spain. The valuation price can differ from the sales price agreed between the buyer and the seller, and serves to establish the amount of the loan to extend.

A tax charged on new-build property transactions. In the Canary Islands, General Indirect Canary Islands Tax (IGIC, by its Spanish acronym) is paid instead of VAT.

The date on which an account entry or a transaction becomes fully effective and which serves as a reference for calculations (interest rates, for example). For operational reasons, the ‘value date’ and the ‘accounting or transaction date’ do not always coincide.

A loan where the interest rate is reviewed at a set frequency. There is usually a predetermined interest rate at the start, a review period (which determines the frequency of the rate change), a benchmark rate (that rises or falls depending on market trends) and a margin or spread (which is added to the benchmark rate to obtain the new interest rate to apply).

A loan where the interest rate is reviewed at a set frequency. There is usually a predetermined interest rate at the start, a review period (which determines the frequency of the rate change), a benchmark rate (that rises or falls depending on market trends) and a margin or spread (which is added to the benchmark rate to obtain the new interest rate to apply).