Do you have a mortgage and are thinking of paying it off early? Then you should know what is meant by “reasonable costs”. These are the costs incurred by the lender in connection with early repayment of the home loan.
What costs can banks charge for early repayment of a home loan?
According to the CNB’s opinion, the necessary costs associated with early termination of the contract, the amount of which is justified, can be considered as “reasonably incurred costs”. So what can banks charge in relation to early repayment costs and what can they not charge?
Pros:
- Administrative costs
- Other costs incurred by the bank that are demonstrably incurred in a given situation but would not have been incurred if the loan had not been prepaid.
Cons:
- The commission paid by the provider to the intermediary for arranging the home loan.
- Reduction in the lender’s interest income after prepayment of the loan, nor its interest expense on the debt.
