How and when the mortgage review is done

What is Mortgage Review?

The mortgage review is an operation that allows us to update what we pay for our variable mortgage. With the revision of the mortgage, the interest we pay is updated with respect to the reference index (usually the Euribor). 

The mortgage review allows us to recalculate the mortgage payment, which causes us to pay more or less for the installment after each review. 

How do you review a mortgage?

The mortgage review is an operation carried out by the bank without the customer having to do anything to make it happen. From time to time, the installment of variable mortgages should be reviewed. To do this, the bank consults the latest updated Euribor level. Then, it takes this Euribor level and adds it to the spread corresponding to the mortgage. From this sum we obtain the interest on our mortgage, which is formulated as a percentage. 

With this percentage, and the amount of capital that we have left to repay (the money we still owe to the bank), we calculate how much we must pay in installments for the mortgage review. 

If you are thinking of repaying capital in advance, in this article we will tell you the keys. 

When is the Euribor of mortgages reviewed?

When we are going to apply for a variable mortgage , one of the aspects we have to take into account is the review of the installment. In general, the mortgage review is done every 6 or every 12 months. 

In any case, the frequency with which the mortgage review is done should be listed in the mortgage deed contract. So, if we want to know when the bank is going to do the review, just check it in the contract. 

How is the mortgage review calculated?

The calculations for the mortgage review are done automatically by the bank. However, if you want to calculate how much your mortgage is going to go up or down, you can use a mortgage simulator to calculate the mortgage review. This way, you will know in advance if you are going to pay more or less for the loan you have already contracted. 

What mortgages are reviewed?

When talking about mortgage review, it should be noted that this review does not affect all mortgages equally. Specifically, there are two types of mortgages that are affected by this review system: 

• Variable mortgages: as the name suggests, these are the ones that vary, and they do so depending on whether the Euribor rises or falls. In other words, they vary precisely because of the revision of the mortgage payment. 
• Mixed mortgages: these mortgages have a tranche that works as a fixed mortgage (it does not vary) and another that works as a variable mortgage. If we are paying the variable interest section, we will have to take into account the mortgage review. 

On the other hand, fixed mortgages are those that do not have a review of the mortgage payment. In the case of fixed mortgages , you always pay the same (which is fixed at the time of signing the mortgage).

If you are thinking of switching from a variable mortgage to a fixed mortgage, in this article we tell you all the keys you need to know before doing so.