Can you prepay your mortgage?

Verified 27 January 2022 - Directorate for Legal and Administrative Information (Prime Minister)

Yes, you can repay part or all of your mortgage in advance, that is, before the end of the loan agreement. However, your loan agreement may impose conditions that must be met.

These conditions depend on the date of signing your loan agreement.

After June 1999

Minimum Amount

Your loan agreement may require you to pay more than 10% the original amount of the loan.

But this minimum amount does not apply if you prepay the balance of your loan (i.e. the total amount remaining to be paid).

Penalties

Your loan agreement may require you to pay compensation (penalties) to the bank.

But the compensation is not due when the early repayment is justified by the sale of your accommodation following one of the following events:

  • Either as a result of your change of work location or that of the person you live with as a couple
  • Either the forced cessation of your professional activity (in particular dismissal) or that of the person with whom you live in a couple
  • Either your death or that of the person you live with in a couple

Where the compensation is due, the amount shall not exceed:

  • the amount of 6 months of interest on the principal prepaid at the average loan rate
  • and 3% of the capital outstanding before early repayment.

FYI  

in the case of a floating rate loan, the compensation may be increased by compensatory interest. The compensating interest is a sum which enables the banker to be assured, over the duration of the loan, of the average rate initially provided for.

Approach

You must apply for an early refund at the bank.

You have to make that request in writing and then send it to the bank.

Please note

the law does not provide for a minimum period of time to make your request to the bank.

The bank's response depends on the date it issued the loan offer you accepted.

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Credit offer issued after June 2016

After receiving your written request, the bank must provide you, free of charge and without delay, with the numerical information enabling you to know the financial consequences of early repayment.

The bank must provide you with this information in paper form or in another durable medium (Internet customer area).

The document submitted by your bank must clearly indicate the assumptions used for the calculations.

Credit offer issued until June 2016

In practice, the bank sends you as soon as possible, after receiving your written request, the numerical information allowing you to know the amount of the sums to be repaid.

You may be charged for this statement.

FYI  

matching the prepayment payment with the payment of the monthly installment avoids having to pay additional fees (intercalary interest).

Before

Minimum Amount

Your loan agreement may require you to pay more than 10% the original amount of the loan.

But this minimum amount does not apply if you prepay the balance of your loan (i.e. the total amount remaining to be paid).

Penalties

Your loan agreement may require you to pay compensation (penalties) to the bank.

Compensation may not exceed 

  • the amount of 6 months of interest on the principal prepaid at the average loan rate
  • and 3% of the capital outstanding before prepayment.

FYI  

in the case of a floating rate loan, the compensation may be increased by compensatory interest. The compensating interest is a sum which enables the banker to be assured, over the duration of the loan, of the average rate initially provided for.

Approach

You must apply for an early refund at the bank.

You have to make that request in writing and then send it to the bank.

Please note

the law does not provide for a minimum period of time to make your request to the bank.

In practice, the bank sends you as soon as possible, after receiving your written request, the numerical information allowing you to know the amount of the sums to be repaid. You may be charged for this statement.

FYI  

matching the prepayment payment with the payment of the monthly installment avoids having to pay additional fees (intercalary interest).

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