In practice, this means that if someone has, say, three and a half years left until the end of the settlement and would like to pay off the mortgage early, and has to pay another 2.7 million of it, he will pay 27 thousand crowns. for this step. So far he has been able to avoid this cost.
The specific amount of the fee will depend on two values. The bank calculates the lost interest that the borrower would have paid under the original conditions, and at the same time calculates a fee of 0.25 percent of the remaining principal for each year until the end of ‘ settlement. The client then pays the lesser of the two amounts.
The so-called reference rate announced by the Czech National Bank will be mandatory. “It consists of the average loan interest rates for consumer housing loans approved over three consecutive calendar months,” said Jiří Sýkora, Swiss Life Select mortgage analyst.
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The CNB has set several standards for banks. In the aforementioned case, when there are three and a half years left until the end of the settlement, it amounts to 4.54 percent.
There are exceptions
There are exceptions to the new rules. For example, they will not apply to contracts that ended before September 1 and those that have a fixed interest rate. And that is until the time comes when this situation ends.
“Even after a year, the client will be able to repay the mortgage early again under the current conditions,” said David Eim, vice-chairman of the board of ‘ intermediary company Gepard Finance.
Lower fees will be paid by those who decide to repay the loan early in the month before the anniversary of the end of the contract. It is then possible to repay up to a quarter of the remaining debt in one go.
It will also be possible to pay the mortgage free of charge in the event of a divorce and joint property settlement of the spouses. And this is given that it also applies to real estate financed by a loan. If people pay their mortgage for more than two years, they will not have to pay even when the property is sold.
Building society clients are also in a unique position. For them, the CNB sets a different reference level than for banks. Now in the aforementioned model case it is 5.86 percent. It is so high that people with a mortgage in one of the savings banks can get an early repayment for free even after 1 September. It will be valid at least until the central bank changes the rates. This should happen once a month.
Low distribution, low repayments
The analyst Sýkora also pointed out that the taxes do not have to be so important even in many other cases. And that at a time when rates on the market only fall very slowly.
As an example of low fees, he cited a client who signed a mortgage with a rate of 5.23 percent in June of this year. At this time when he had to pay a million kronerof the contract with a three-year settlement in September, his reference interest would be 5.14 percent. So the bank had to pay about 3,500 crowns for early repayment.
“If the rate reduction is slow, it may happen that the client will not pay even a thousand crowns in the fee for the necessary administrative costs in case of early repayment,” said Sýkora.
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2024-08-21 03:22:00
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