Thanks to the need to secure real estate, we mostly use the mortgage loan for higher investment in housing.
Smaller investments are usually solved by building savings
The monthly mortgage payment often reaches high amounts and puts a heavy burden on the family budget. Mortgages often have long (20 years or more) maturities, so there is a high probability that, at the time of repayment, the family may lose free funds for various reasons (property sale, inheritance, building savings contract). One effective way to make use of this money is to repay part or even the entire mortgage.
When to repay the mortgage and how much it will cost us:
- The best time to repay the mortgage early is when the fixation period is over. If a client repays a mortgage or part of it at this time, most banks do not charge any penalties or fees. And if they do, they are only minimal fees for changing a loan agreement in the order of several hundred crowns. If you expect a more substantial financial injection in the next few years when making a mortgage contract, consider this when choosing the length of the fixation period.
- Some banks offer the possibility to repay the mortgage prematurely without penalty, even outside the fixation period. It is Gold Bank, which offers a fee of 1% of the prematurely paid amount to enter this option into a mortgage loan contract when it is signed. Another bank is Money Bank. The company offers a monthly flat rate of CZK 200 to sign an optional extra product for the mortgage loan when signing a mortgage loan contract. The first extraordinary installment can be made by the client only after the first 12 regular mortgage payments have been paid, each additional after the next 7 regular installments.
- Repayment of a mortgage or its part outside the fixation period should be considered twice, it is an expensive matter, the amount of which can, according to the parameters of the repaid mortgage, reach even tens of thousands of crowns. What are the penalties for early repayment of the mortgage can be seen in the table below?
|Name of the bank||Fee for early repayment outside fixation period|
|Rose Bank||up to 5 years before the end of the fixation period – 6% of the extraordinary installment for each commenced year until the end of the fixation period, 5-10 years -5%, 10-15 years – 4%|
|Cream Bank||lost interest from the time of early sleeping after the end of the fixation period|
|Lineing Bank||maximum of 25% of the outstanding loan principal|
|Tser Bank||early repayment in part – 4% of the extraordinary installment amount, early repayment in full – 4% of the current amount due|
|NNC Bank||5% of the extra payment amount until the end of the fixation period|
|Lipon Bank||in the first half of the fixation period – 20% of the extraordinary installment, in the second half of the fixation period – 10% of the extraordinary installment|