Selling with an existing mortgage in Spain.

On the completion day at notary, the sale and the mortgage cancellation are signed in parallel. The buyer's payment is split at the point of transfer: the amount required to clear your mortgage (capital + accrued interest + cancellation fee) is paid directly to your lender via bank cheque or wire, and the residual is transferred to you. Your bank has attended or provided a signed cancellation deed. The Land Registry receives both documents and updates the title.

From the seller's perspective, nothing new is required beyond signing the escritura de compraventa: your lawyer coordinates the timing with your bank so that everything meets at the notary. The complexity, when there is any, sits in the numbers.

Spanish law caps early-cancellation penalties on residential mortgages. For loans signed on or after 16 June 2019 (the date the current mortgage law took effect):

• Variable-rate mortgages. Maximum 0.25% of outstanding capital if cancelled within the first three years; 0.15% between years three and five; zero thereafter.
• Fixed-rate mortgages. Maximum 2% within the first ten years, 1.5% thereafter — subject to the bank being able to demonstrate financial loss (in practice, the cap is applied).

Loans signed before June 2019 are governed by the terms of the original escritura de hipoteca (often with a 0.5% early-cancellation penalty). Ask your bank for a written figure — do not rely on a phone quote.

The single administrative document that governs the numeric side of the sale is the certificate of outstanding debt (certificado de deuda pendiente or saldo pendiente). It states, on a specified date:

• Outstanding principal capital.
• Accrued interest to date.
• Cancellation fee applicable if closed on the target completion date.
• Any pending administrative fees.

Your lawyer requests this typically 15 working days before target completion, and requests an updated version dated the day of the notary. The number in that final version is what the buyer's payment covers. Small differences in accrued interest are settled in the final proceeds transfer.

Subrogation is the mechanism whereby the buyer takes over your existing mortgage rather than opening a new one. It saves the buyer some setup costs (opening fee, appraisal) and avoids a mortgage-cancellation penalty for you. It is comparatively rare in Orihuela Costa because:

• The buyer's bank must consent, or it stays with your bank. Cross-bank subrogation is a formal process; keeping your existing lender is more straightforward but the buyer inherits terms not designed for their profile.
• Interest-rate environment matters. Subrogation is more attractive when your mortgage's terms are meaningfully better than what the buyer can obtain fresh. This is uncommon in a rising-rate environment.
• It is credit-conditional on the buyer. The taking-over bank must approve the buyer's financial profile — same underwriting as a fresh application.

Where subrogation genuinely benefits both sides, your lawyer will structure it. Otherwise the standard cancellation-and-fresh-mortgage flow applies.

If the achievable sale price is below the outstanding mortgage balance, the sale can still complete — but it requires bank agreement in advance. Three options are typical:

• Top-up at notary from personal funds. The seller provides the shortfall in cleared funds on the notary day. Simplest, when personal liquidity permits it.
• Unsecured personal loan from the same bank. The bank converts the shortfall into a personal loan repayable over a defined term. Requires the bank's approval.
• Dación en pago. The bank accepts the property in lieu of the outstanding debt. Rare in an ordinary market and only offered where the alternative would be repossession — but a legitimate route in specific circumstances.

Speak to your Spanish bank at the valuation stage — not after a buyer is found. A written statement from the bank on which of the three routes it will support is worth more than any assumption.

• Escritura de compraventa (your original title deed).
• Escritura de hipoteca (your original mortgage deed — for cancellation terms).
• Most recent mortgage statement showing current outstanding balance and monthly instalment.
• Recent IBI receipt.
• Community fee certificate showing no debts.
• Standard sale documentation set (energy certificate, utility bills, cédula, community statutes where applicable).
• NIE for every legal owner (current).