Will the new law change a cost of mortgage refinancing? Cesta k novému bydlení nikdy nebyla jednodušší
čtvrtek 17. srpna 2023
An amendment to the Act on Consumer Credit is heading to parliament, which specifies the maximum fee that banks will charge clients for early mortgage repayment (especially in case of refinancing). The previous regulation was ambiguous and the interpretation of the CNB tipped the balance in favor of clients, who today can pay off or refinance their mortgage at practically any time with a cost of only a few hundred crowns.
Discussion of the amendment will begin after the holidays and will certainly bring a new topic for many populists. We will therefore have to wait for the final wording of the law. If it passes, the effectiveness is expected from the beginning of next year, and the adjustment should also apply to already existing mortgages.
If the amendment do not pass, this imbalance will turn against all clients. It will make no sense for banks to offer clients longer fixed rates and will prevent the much-anticipated drop in interest rates.
What should the new conditions for extra payments (refinancing) look like?
Extraordinary installments will be free of charge in the following cases: at the end of each interest rate fixation, on the anniversary of the signing of the contract up to 25% per year, in difficult life situations, and now also during the property sale or divorce.
In other cases (e.g. in case of refinancing), a common maximum limit for the amount of the fee should apply – 2% of the early repaid principal (for a loan of 1 million, it is CZK 20,000).