Conditions of prepayment of mortgage loan
The prepayment of the mortgage loan is authorized by the terms of the credit. Be careful though to check the terms in the contract signed with the lender before a notary.
The law also allows the lender to refuse a partial prepayment that would be less than 10% of the initial paid-up capital.
Penalties in case of early repayment of mortgage loan
Financial penalties may be claimed by the lender in the event of early repayment of the mortgage life loan. They vary according to the repayment methods and the period:
- When the prepayment is made before the fifth year, the penalties represent four months of interest in the case of paid-up capital at one time and five monthly installments for a paid-up capital periodically;
- Between the fifth and the ninth year, the indemnities represent two months of interest for a paid-up capital at once, and three monthly installments for a paid-up capital on a regular basis;
- If the repayment is made in the tenth year, the penalties are one month of interest for the paid-up capital at one time and two monthly installments for a paid-up capital periodically.
How to make an early repayment of the mortgage life loan?
When the borrower wishes to make an early repayment of the mortgage life loan, he must notify the lender promptly.
After having made sure to have the necessary funds in a bank account, the latter sends a registered letter with acknowledgment of receipt to the institution where he took out his loan.
This letter must imperatively specify:
- Contact information of the borrower;
- The contract number of the loan;
- The amount of the early repayment if the latter is partial;
- The number of the account that will be used for the transfer;
- A request for confirmation of the amount of the penalties.
Early repayment of the mortgage life loan on the best terms
The prepayment of the mortgage life loan resulting in financial penalties, it is essential to calculate the method that will result in the least costs.
As a first step, you must consult the amount of the nominal rate and establish a formula:(amount of capital received x nominal rate) / 12 = amount of monthly interest.
Then you have to take into account the loan start date and the desired early repayment date, in order to pay a minimum of penalties.