Buying & selling · · 13 min read
Selling a Flat with a Mortgage in Spain in 2026: Paying It Off at the Notary, Subrogation, Fees and Costs in Madrid
You can sell a flat in Spain that still has a mortgage on it, and it is very common. We explain the three options (paying it off on completion day with the sale money, letting the buyer take it over or paying it off beforehand), how to ask your bank for the redemption statement, how much it can charge you for early repayment under Law 5/2019, what removing the mortgage from the Land Registry costs and a full worked example with Madrid figures.
“I want to sell my flat, but I still have years left on the mortgage.” It is one of the most common questions from people thinking of selling in Spain, and the answer is reassuring: yes, you can, and the debt is normally paid off with the sale money itself, on the same day and at the same notary’s office. The buyer gets the property free of charges and you receive the difference.
That said, a few things are worth preparing in advance: the redemption statement from your bank, any compensation for early repayment, the cancellation at the Land Registry and how all of this is reflected in the arras contract (the deposit agreement signed before completion). The taxes on the sale (municipal plusvalía and income tax) are covered separately in “Taxes When Selling a Flat in Spain in 2026”.
Can you sell a flat that still has a mortgage?
Yes. A mortgage is the bank’s security over the property: it is recorded at the Registro de la Propiedad (Land Registry) and appears as a charge on the nota simple (land registry extract), the summary the Registry issues showing who owns a property and what charges it carries. The bank cannot prohibit the sale, but the mortgage stays attached to the property until it is cancelled, and the debt remains yours until you pay it or the bank agrees that someone else can take it over. Since the buyer wants the property free of charges, part of the price usually goes straight to your bank at the notary’s office.
It is a common situation. According to the Notaries, in July 2026 56.1% of home purchases in Spain were financed with a mortgage, and according to the INE new home mortgages are signed for an average term of 26 years: many people sell before they have finished paying.
| Indicator | Figure | Period | Source |
|---|---|---|---|
| Home purchases with a mortgage loan | 56.1% | July 2026 | Notaries |
| Average interest rate on new home mortgages | 3.01% | July 2026 | INE |
| Average term of new home mortgages | 26 years | July 2026 | INE |
| Home mortgages in the Community of Madrid | −5.2% year on year | July 2026 | INE |
| Mortgages with a change of borrower (subrogation) | 2,676 (−19.6% year on year) | July 2026 | INE |
Sources: Consejo General del Notariado (July data published on 30-9-2026, via Alimarket) and INE (press release of 28-9-2026). The INE subrogation figure covers all types of property, not only homes.
The three options: pay it off at the notary, subrogation or pay it off beforehand
| Option | How it works | Bear in mind |
|---|---|---|
| Pay it off on completion day | At the notary’s office, part of the price is paid to your bank to clear the debt and you receive the rest | The most common route; you need to coordinate the statement and the signature of the bank’s representative |
| Subrogation by the buyer | The buyer takes over your mortgage and pays you the price minus the debt they assume | Requires the bank’s consent; without it, you remain liable for the debt |
| Pay it off before selling | You repay the debt with other funds and cancel the mortgage before looking for a buyer | You need the cash up front; the nota simple comes out clean |
Sources: Banco de España, “Venta del inmueble con hipoteca” (Selling a mortgaged property); Ley Hipotecaria, article 118.
Option 1: paying off the mortgage on completion day
You do not need to put up any money in advance. The buyer, or their bank if they are buying with a mortgage, pays what you owe your lender at the notary’s office and hands you the rest of the price. According to the Banco de España, the debt is settled by a cheque before the notary or by an OMF (orden de movimiento de fondos, a bank-to-bank transfer through the Banco de España), and the property is then released from the mortgage. The usual steps:
- Tell your bank about the sale and the expected date, and ask for a statement of the outstanding debt as at that day.
- Send it in good time to the notary and to the buyer so the split of the price can be prepared.
- Ask the bank to send its apoderado, the person authorised to sign on its behalf, to the signing. You cannot be charged for their travel, and they can also sign by videoconference through the Portal Notarial del Ciudadano (the notaries’ online portal).
- At the signing, the part of the price that covers the debt goes to the bank, by cheque or OMF, and the rest is paid to you.
- The apoderado signs the carta de pago (the bank’s receipt confirming it has been paid) and the cancellation deed, then or later.
- Finally, the cancellation is recorded at the Land Registry.
How to ask your bank for the redemption statement
The certificado de deuda pendiente (redemption statement) shows how much you must pay to clear the mortgage on a specific date. Ask for it stating that it is to repay on a sale and give the exact signing date, because interest accrues every day. For mortgages covered by Law 5/2019, the contract can require up to one month’s prior notice, and once you give notice the bank must provide, within three working days at most, the information you need to assess the repayment. Check that the statement shows:
- The outstanding capital on the signing date and the interest since the last instalment.
- The early repayment compensation, if it applies, with its calculation.
- Any unpaid instalments or late-payment interest, if there are any.
- The account for the OMF, or who the cheque must be made out to.
Once the debt is paid, the bank must give you the certificado de deuda cero (zero-balance certificate), proving you owe nothing, free of charge.
Option 2: the buyer takes over your mortgage (subrogation)
Subrogation means stepping into your shoes: the buyer takes on your mortgage with its terms and the price they pay you is reduced by the debt they keep. The Ley Hipotecaria allows this, but the seller is only released from the debt if the bank agrees, and the bank will assess the buyer’s creditworthiness as if it were granting a new loan.
The former shall be released from that obligation if the creditor gives its express or tacit consent.
Ley Hipotecaria (Spanish Mortgage Act), article 118
It may appeal to the buyer if your mortgage has better terms than today’s, for example a fixed rate signed years ago below the current 3.01% average. The bank may charge a subrogation fee if your deed provides for one, and a subrogation signed after 16 June 2019 falls under the limits of Law 5/2019. Above all, do not sign the sale without the bank’s written consent: without it, you could remain liable for a debt on a property you no longer own.
Option 3: paying off the mortgage before selling
If you have savings or are about to receive money from another sale, you can repay the debt before listing the flat. You go to market with a nota simple free of the mortgage and the signing is simpler, in exchange for needing the cash up front. The steps and costs of the registry cancellation are the same as those described below.
Early repayment fees: the limits under Law 5/2019
If you repay your mortgage early, the bank may charge you compensation if your contract provides for it. For home mortgages signed by individuals from 16 June 2019, or subrogated or novated (amended) after that date, article 23 of Law 5/2019 sets these maximums on the capital you repay:
| Type of mortgage | When you repay | Maximum |
|---|---|---|
| Variable (one of the two contract options) | In the first three years | 0.25% |
| Variable (the other option) | In the first five years | 0.15% |
| Variable | After those periods | 0% |
| Fixed | In the first ten years | 2% |
| Fixed | From the tenth year | 1.5% |
| Switch from variable to fixed by novation or subrogation | In the first three years | 0.05%; after that, 0% |
Sources: Law 5/2019, article 23 (BOE, Official State Gazette); Banco de España, Portal del Cliente Bancario (bank customer portal). For variable rates, the contract chooses one of the two options. In no case may the compensation exceed the bank’s financial loss.
That last limit matters. The financial loss compares the capital you repay with the market value your loan would have for the bank. With a fixed-rate mortgage signed at a rate well below today’s, the bank may lose nothing, in which case it should not charge you compensation, even within the first ten years. Ask for the statement to show the calculation.
If your mortgage predates 16 June 2019 and has not been novated or subrogated since, your deed and the rules in force at the time apply. For loans signed from December 2007, Law 41/2007 capped the early repayment compensation at 0.5% in the first five years and 0.25% after that, and compensation for interest rate risk does not apply if the repayment produces a gain for the bank.
Paying off the debt vs removing the mortgage from the Registry
Paying the debt is the financial cancellation. But the mortgage stays on the Land Registry until the registry cancellation: a cancellation deed signed before a notary and then registered. In a sale it is essential, and according to the Banco de España the cancellation deed is paid for by the seller. The steps:
- The zero-balance certificate, which the bank must give you free of charge.
- The cancellation deed before the notary of your choice, signed by the bank’s apoderado, who cannot charge you for the signing or the travel.
- Filing the stamp duty return (impuesto de actos jurídicos documentados, AJD, a tax on certain notarial deeds) with the Community of Madrid: filing is compulsory, but the cancellation is exempt.
- Registration at the Land Registry: from then on the mortgage no longer appears on the nota simple.
- If you do not want to handle the paperwork yourself, a gestoría (an administrative agency) or the bank itself, which may then charge fees and expenses it must disclose in advance.
First copies of notarial deeds documenting the cancellation of mortgages of any kind.
Royal Legislative Decree 1/1993, article 45.I.B).18, among the tax exemptions
| Cost | What the rules say | Approximate amount |
|---|---|---|
| Notary (cancellation deed) | Fee scale of €30.05; no page charges from the fifth page | €100–300, with copies, VAT and other items |
| Land Registry | Base: outstanding capital reduced by 90%; minimum €24.04 and maximum €2,181.67, with a 5% discount | €30–200 |
| Gestoría (optional) | Unregulated price | €100–500 |
| Stamp duty (AJD) | Exempt | €0 |
| Approximate total | — | €400–1,000 |
Sources: Royal Decree 1426/1989 and Royal Decree 1427/1989 (fee scales for notaries and land registrars, BOE); Royal Legislative Decree 1/1993, article 45; approximate amounts from Rastreator (January 2026). Fee scale amounts exclude VAT. If your bill is far off these figures, ask for a breakdown.
What if you owe more than you will get for the flat?
It can happen with mortgages that financed almost the whole price or purchases made at a market peak. The bank only cancels the mortgage if it receives the whole debt, unless it agrees otherwise with you, and you still owe any shortfall even after selling. If you sell for €300,000 and owe €320,000, you will have to bring the missing €20,000 to the notary, plus costs. Your options:
- Cover the difference with savings on completion day, so the bank is paid in full and cancels.
- Ask your bank, before committing to anyone, whether it would finance the difference, for example with a personal loan, with its own terms and costs.
- Consider subrogation if the buyer can take on the whole debt and the bank agrees.
Arras with an outstanding mortgage: what the contract should say
The arras are the deposit the buyer pays to reserve the property, and the arras contract sets the price, deadlines and conditions until the deed. The buyer will see the mortgage on the nota simple, so it is best to put in writing from the start how it will be cancelled:
- That there is a mortgage in favour of a named bank, with the approximate debt at the date of the contract.
- That the property will be handed over free of charges and the mortgage will be cancelled with part of the price on the day of the deed.
- How payment is split at the notary’s office: what goes to the bank according to the updated statement, by cheque or OMF, and what the seller receives.
- How far in advance the seller will provide the redemption statement.
- Who pays the bank’s compensation and the registry cancellation, which normally fall to the seller.
- If subrogation is agreed, that it is conditional on the bank accepting it in writing within a deadline, and what happens if it does not.
If on the date of the deed you cannot hand over the property free of charges, the problem is no longer only with the bank but with the buyer too. We cover types of arras, amounts and deadlines in “The Arras Contract in Spain in 2026” and the paperwork you need in “Documents Needed to Sell a Flat in Madrid in 2026”.
Linked insurance and other products: what to cancel
Many mortgages come with linked insurance: buildings and contents cover, which is compulsory when taking out a mortgage, and often life cover. Law 5/2019 provides that, when the loan is repaid early, any ancillary insurance of which the bank is the beneficiary ends with the loan, unless you ask to keep it, and that you are entitled to an extorno: a refund of the unused part of the premium.
- Linked life insurance: check that it is cancelled and claim the unused premium, especially if you paid a single premium covering several years.
- Home insurance: on a sale, the law generally provides that the buyer takes over the policy. You must tell them in writing and notify the insurer within the following 15 days; either of them may terminate it.
- Products you kept for a rate discount, such as having your salary paid in or cards: once the mortgage is repaid they no longer bind you.
- Direct debits for the property (IBI property tax, community fees, utilities): change them as agreed with the buyer.
Full worked example: selling a flat with a mortgage in Madrid
A flat in Madrid sells for €420,000. It has a variable-rate mortgage signed in March 2022 with the 0.15% compensation agreed for the first five years, and the deed is signed in November 2026, still within that period. The buyer paid 10% as arras and pays the rest at the notary’s office. Apart from the legal limits, the figures are illustrative.
| Item | Amount |
|---|---|
| Sale price | €420,000.00 |
| Received when the arras were signed (10%) | €42,000.00 |
| Outstanding on the day at the notary’s office | €378,000.00 |
| Outstanding mortgage capital (assumption) | €165,000.00 |
| Interest from the last instalment to the signing (assumption) | €300.00 |
| Early repayment compensation (0.15% of €165,000) | €247.50 |
| Total paid directly to the bank at the notary’s office (cheque or OMF) | €165,547.50 |
| What the seller receives at the notary’s office | €212,452.50 |
| Registry cancellation: notary, Registry and gestoría (assumption) | −€700.00 |
| Llavely sales fee (2.5% + VAT) | −€12,705.00 |
| Net for the seller, before the applicable taxes | €241,047.50 |
Illustrative example. It does not include municipal plusvalía, income tax, other minor sale costs or any refund of insurance premiums. Compensation limits: Law 5/2019, article 23.
If the mortgage were fixed-rate and in its first ten years, the compensation could reach 2%, up to €3,300 in this example, though never above the bank’s actual financial loss. And the applicable taxes still have to come off that net figure: municipal plusvalía and, if there is a gain, income tax. We explain them in “Taxes When Selling a Flat in Spain in 2026”.
How we do it at Llavely
At Llavely we have more than 35 years in the property sector, with specialist lawyers. Our lawyers, included in the price, check the nota simple, charges and debts on the property from the outset, including the outstanding mortgage; they draft the arras with any special clauses needed to make clear how it will be cancelled on completion day, calculate the applicable taxes, review the deed and come with you in person to the notary.
Before every viewing we talk to the buyer and check their ID, and if they need a mortgage we put them in touch, at no cost, with a mortgage broker. All payments are made by ordinary bank transfer or OMF, never in cash, and you follow everything from your private seller portal. You only pay if you sell, on the day at the notary’s office: 2.5% + VAT, all inclusive.
What we cannot do is decide for your bank: the compensation and whether a subrogation is accepted depend on your contract and your lender. What we do is make sure you arrive at the notary’s office with the figures worked out and a contract that reflects them. If you are thinking of selling, ask for your free valuation: we give you a price range straight away, then call you, see the property and fine-tune the price (we reply in English by email, message or phone).
Frequently asked questions
Can I sell my flat in Spain if I haven’t finished paying the mortgage?
Yes. The usual route is to pay off the mortgage on completion day with part of the sale money: at the notary’s office your bank is paid the debt shown on the redemption statement, by cheque or OMF transfer, and you receive the rest. The buyer can also take over the mortgage if the bank agrees, or you can pay it off before selling.
How much will the bank charge me for repaying the mortgage early when I sell?
It depends on your contract. For mortgages signed from 16 June 2019, Law 5/2019 caps the compensation on variable rates at 0.25% in the first three years or 0.15% in the first five, depending on what was agreed, and nothing after that; on fixed rates, at 2% in the first ten years and 1.5% afterwards. It can never exceed the bank’s actual financial loss.
Who pays for cancelling the mortgage when a flat is sold?
Normally the seller, because it is their mortgage; according to the Banco de España, the cancellation deed is paid for by the seller. Notary, Registry and gestoría usually add up to between €400 and €1,000, and the cancellation is exempt from stamp duty (AJD). It is worth putting this in writing in the arras contract.
Can the buyer take over my mortgage?
Yes, through subrogation, but it needs the consent of the bank, which will assess the buyer’s creditworthiness. Under article 118 of the Ley Hipotecaria, the seller is only released from the debt if the bank consents. The bank may charge a subrogation fee if the deed provides for one.
What is the difference between paying off the mortgage and cancelling it at the Registry?
Paying it off clears the debt. The registry cancellation removes the mortgage from the Land Registry with a cancellation deed signed by the bank’s representative and then registered. Until that is done, the mortgage still appears on the nota simple even if you owe nothing, and in a sale the buyer will want it removed.
How long does the bank take to give me the redemption statement?
For mortgages covered by Law 5/2019, the contract can require up to one month’s notice, and once you give notice the bank must provide the information you need to assess the repayment within three working days at most. Ask in good time and give the exact signing date, because the interest changes every day.
What happens if I sell the flat for less than I owe the bank?
The bank will only cancel the mortgage if it is paid in full, unless it agrees otherwise with you. You will have to pay the difference on completion day or agree with your bank how to pay it, for example with a personal loan. Settle this before signing the arras.
Do I get money back on the mortgage life insurance if I pay off the loan?
Law 5/2019 provides that, when the loan is repaid early, any ancillary insurance of which the bank is the beneficiary ends, unless you ask to keep it, and that you are entitled to a refund of the unused part of the premium. Check this especially if you paid a single premium covering several years.
Sources
- Home sales record seven consecutive months of decline in July, data from the Consejo General del Notariado (General Council of Notaries) (Alimarket, 30 September 2026)
- Hipotecas sobre viviendas (Home mortgages), July 2026, press release (INE, National Statistics Institute, 28 September 2026)
- Ley 5/2019, de 15 de marzo, reguladora de los contratos de crédito inmobiliario (Law 5/2019 regulating real estate credit agreements), consolidated text (BOE, Official State Gazette)
- Compensation or fee for full or partial early repayment of a mortgage (Banco de España, Portal del Cliente Bancario)
- Arrangement and early repayment fees under Law 5/2019 (Abogacía Española, Spanish Bar Council, consumer law blog, 6 June 2019)
- Ley 41/2007, de 7 de diciembre (Law 41/2007 amending the Mortgage Market Act), consolidated text (BOE)
- Selling a mortgaged property (Banco de España, Portal del Cliente Bancario)
- Fee for subrogation of the borrower on a mortgage (Banco de España, Portal del Cliente Bancario)
- Mortgage subrogation, with article 118 of the Ley Hipotecaria (Conceptos Jurídicos, updated 25 March 2026)
- Mortgage cancellation can also be processed electronically (Banco de España, Portal del Cliente Bancario, 12 February 2025)
- Registry cancellation of the mortgage (Banco de España, Portal del Cliente Bancario)
- Real Decreto Legislativo 1/1993 (consolidated Transfer Tax and Stamp Duty Act), consolidated text (BOE)
- Real Decreto 1426/1989 (notaries’ fee scale), consolidated text (BOE)
- Real Decreto 1427/1989 (land registrars’ fee scale), consolidated text (BOE)
- How much does it cost to cancel a mortgage? (Rastreator, 30 January 2026)
- Ley 50/1980, de Contrato de Seguro (Insurance Contracts Act), articles 34 and 35, consolidated text (BOE)