The early repayment of the loan is the practice with which the borrower asks to repay in advance all the sum received on loan , or even just a part: in this case we speak of partial extinction. This choice can be dictated by the desire to save on interest , as these will not be counted on the part of the capital repaid in advance. To better understand if the mortgage repayment plan is sustainable, and if an early repayment would be possible, it is always possible to carry out a mortgage calculation in order to have a clearer view.
It is clear that this possibility is convenient for consumers, but less for banks, which lose interest on the capital repaid in advance
Law 40/2007, that is, the law that converted the Bersani decree into law, has made this choice even more convenient for those who have opened a loan for their first home. In fact, for all mortgages granted starting February 2, 2007, banks or financial institutions can no longer ask for a penalty. To pay off the loan early, it is sufficient to communicate this will to your bank.
However, given the long duration of these loans, many Italians still hold mortgages open before this date
In this case, it is still possible for the bank to request a penalty for returning the remaining capital in advance. Although the conditions change from bank to bank, there are some general rules to follow, according to an agreement between the ABI and consumer associations:
- for variable rate mortgages granted before 2 February 2007 and those with fixed rates opened before 1 January 2001, there is no penalty if the termination takes place in the last two years before the loan expires. There is a maximum penalty of 0.20% if you repay in the third or last year of the loan or 0.50% if the redemption takes place before that year.
- for fixed-rate loans granted after 31 December 2000, no penalty is provided for in the last two years before expiry. The maximum penalty is 0.20% in the third last year, 1.50% if you repay the loan in the second half of the amortization period (but before the third last year) and 1.90% if the full or partial repayment takes place in the first half of the amortization period. However, if the contract provided for fines greater than those indicated, there will be a reduction of 0.25%, if the penalty is greater than 1.25%, and 0.15% if it is lower than the threshold.
To sum up, for the most recent loans, the mortgage repayment is without penalties: otherwise the rules of the described agreement must be followed.