Increase Your Mortgage: How to Do It (2026)

Currently, a home is the largest source of wealth for many families. Over time, new financial needs often arise, and extending your mortgage presents a powerful option, often with more favorable terms than other forms of financing. This article will help you understand the entire process, its requirements, costs, and alternatives, so you can make an informed decision.

What does it mean to extend a mortgage?

Extending a mortgage, also known as a capital increase subrogation, is a process by which you request additional credit from the bank holding your current mortgage, using the same already-mortgaged property as collateral. This results in an increase in the borrowed capital and, consequently, in the monthly payment.

This process should not be confused with a novation, which modifies existing terms, nor with a remortgage, which involves switching banks.

You might be interested in: remortgaging your home.

Types

Extension with the same collateral and terms

This is the most common type. The lender grants additional capital while maintaining the same remaining repayment period and typically applying an interest rate similar to or slightly higher than that of the original mortgage. The advantage is its simplicity.

Extension with new collateral

To access a very significant amount of money, the lender might require additional collateral. This could be another guarantor or even the inclusion of a new property as enhanced collateral.

Extension with change of terms (Novation + Extension)

The extension is used to globally renegotiate the mortgage. The request for more capital is combined with a novation that modifies the interest rate or extends the repayment period so that the impact on the monthly payment is not so abrupt.

Most common reasons to extend a mortgage

Extending a mortgage for renovations

The mortgage is extended to finance a comprehensive renovation, home expansion, or to improve its energy efficiency, which usually increases the property's value. Since the money is intended for improving the asset that serves as collateral, banks generally view this option very favorably.

Extending a mortgage to buy another home

This is a very common strategy. The money obtained from the extension is used as a down payment for a new mortgage, allowing you to diversify your assets or acquire a home for children or as an investment. (Read more about: second home mortgages 2025).

Mortgage extension to consolidate debts

If you have several high-cost debts, extending your mortgage allows you to consolidate them into a single payment with a significantly lower interest rate. This eases monthly financial pressure and can lead to substantial savings on interest.

You may also like: cost of a complete renovation for a 50-square-meter apartment.

Requirements

For a mortgage extension, the property's current value must be significantly higher than the outstanding principal balance of the original mortgage.

The lender will re-evaluate your current financial situation to ensure you can afford the new, higher payment. The amount of the new payment should not exceed a certain percentage of your net income.

You must have an impeccable payment history, and depending on the amount requested and your profile, the bank might require guarantors.

How to get a mortgage extension?

First, estimate your home's capital gain. Then, contact your bank to request an official appraisal.

Submit your extension application to your current bank and negotiate the terms for the new capital. The bank will analyze the new appraisal, your updated repayment capacity, and your credit history.

If everything is favorable, the bank will provide you with a binding offer detailing all the extension conditions. You will have a legal period to review it.

Once the offer is accepted, you must go to the notary to sign the new capital extension deeds. This is a necessary step to register the change in the Property Registry. The administrative agency or the bank itself will handle registering the extension deed, legally documenting the new mortgage amount.

When is it recommended?

• When your home's value has increased significantly.
• When you need a large sum of money and a personal loan would be too expensive.
• When your current repayment capacity is better than when you took out the original mortgage.
• When the money is destined for a smart investment that will generate more value.
• When the interest rates for the extension are significantly lower than those of other financing options.

What are the costs of a mortgage extension?

Property Appraisal

An independent official appraiser must value the home to determine its current market price. This usually ranges between 200 and 500 euros.

Notary and Registry Fees

The costs of legal formalization, the signing of the extension deed before a notary, and its subsequent registration in the Property Registry can amount to between 500 and 1,200 euros.

Mortgage Extension Fee

The fee charged by the bank for the service of reviewing and formalizing the extension. It is usually a percentage of the extended capital (for example, between 0.5% and 1%). This is negotiable.

Stamp Duty on Documented Legal Acts (AJD)

This tax applies to the formalization of the extension deed. Its rate varies significantly depending on the autonomous community, from almost 0% in Madrid to over 1.5% in others. It is applied to the extended capital.

Remortgage or Extend Mortgage: Which is the best option?

The best option will depend on whether your current bank offers you good conditions or if, on the other hand, another bank is willing to significantly improve the overall offer.

Extending is simpler and faster. It may have fewer costs by avoiding some procedures. Ideal if you are satisfied with your bank.

Remortgaging (transferring your mortgage to another bank) involves moving your entire mortgage (the existing part and the new extension) to a new lender. The process is more complex and involves more costs, but it can allow you to access much better conditions for the entire debt.

Advantages and Disadvantages

Advantages include obtaining a lower interest rate, a longer repayment period, the possibility of obtaining large sums of money, and consolidating expensive debts into a cheaper one.

Its disadvantages are that it increases the total debt and the total cost in interest, that the property is once again further pledged, the processing fees, and the increase in the monthly payment.

Useful Tips Before Extending

Negotiate with your bank and compare with others.

Negotiate fees and interest rates. Also, compare what your current bank offers with what you could get from another bank.

Calculate the real impact on your finances

Use mortgage calculators to accurately determine how the new payment will affect your monthly finances.

Read the fine print carefully

Pay special attention to the clauses of the new offer, any associated insurance policies, and fees for partial early repayment.

Are there other alternatives?

Personal loan

Ideal if you need a smaller amount of money for a short term (5 to 8 years). It's faster and doesn't involve setup costs, but its interest rate is much higher.

Line of credit or home equity loan

A line of credit allows you to access funds as needed, paying interest only on the amount used.

Reverse mortgage

For those over 65. It allows you to receive a monthly income or a lump sum using your home as collateral, without having to sell it or make monthly payments.

Frequently Asked Questions (FAQs)

Can a mortgage be extended at any time?

It depends on your contract terms and your bank's policy. It's most common to be able to do so once you've repaid a significant portion of the principal or if the property has increased in value. Some banks require at least 1 or 2 years to have passed.

What's better, extending a mortgage or taking out a personal loan?

It depends on the amount, term, and purpose. For large amounts (from €60,000) and long terms, extending your mortgage is almost always better. For smaller amounts and immediate needs, a personal loan can be quicker and simpler.

Which has higher interest, a mortgage or a personal loan?

A personal loan has a significantly higher interest rate (7% nominal interest rate or more) than a mortgage (3% to 4% nominal interest rate).

What's the difference between a mortgage novation and an extension?

Novation modifies the terms of an existing debt without increasing the principal amount borrowed. An extension increases the amount of money borrowed, creating new additional debt under the same collateral. Both processes can be combined.

Which banks allow mortgage extensions with better terms?

Conditions vary constantly and depend on your profile, your relationship with the bank, and the property's equity. Bankinter, BBVA, Sabadell, CaixaBank, and Santander typically offer competitive products.

Can you extend a mortgage without changing banks?

Yes, it's the most common approach. Mortgage extensions are usually done with the same bank that holds the original mortgage, to simplify the process.

Is a new appraisal necessary to extend the mortgage?

Yes, the bank requires an official and recent appraisal to determine the property's current market value and calculate the maximum percentage it can lend you.

Looking for alternative ways to invest in real estate?

Domoblock is the platform for real estate investment with projects like house flipping and building flipping, with extensive experience in real estate tokenization and real estate crowdfunding. Thanks to these real estate you can increase your savings and secure your financial future.

Invest in property fractions starting from €200 and enjoy high returns. Diversify your portfolio today with Domoblock, visit our page and discover all the opportunities we have for you.

Domoblock has various projects of real estate investment in Madrid, real estate investment in Alicante, real estate investment in Zaragoza and real estate investment in Valencia. Check it out!

Conclusion

Increasing a mortgage is a powerful financial tool that allows you to leverage the accumulated equity in your home with a low interest rate and a long term. However, it is not without risks. The key to making an informed decision lies in a thorough analysis of your finances and the available options to make a smart choice.

‍