In case of an early repayment of a mortgage loan, the mortgage lender may not charge a fee which exceeds its actual financial loss. For the calculation of the financial loss, the recently published AFM guidelines should be taken into account.
The consumer has the right to make extra repayments or to early redemption of its mortgage loan. In such a case, the mortgage lender is allowed to charge a fee which may not exceed its financial loss, of which a calculation should be provided to the consumer. This rule is an implementation of the Mortgage Credit Directive, which entered into force as of 14 July 2016.
On 20 March 2017, the AFM published the Guidelines on payments relating to early redemption of mortgage loans (Leidraad Vergoeding voor vervroegde aflossing van de hypotheek, the Guidelines). The actual financial loss of the mortgage lender can be calculated according to the net present value method. This method entails that the missed contractual interest payments due to the early redemption will be compared with expected future payments on the basis of a comparison interest rate. The following principles should be taken into account:
- The early redemption fee is calculated on the basis of the total amount that the consumer wishes to repay, minus the amount the consumer is allowed to repay without a charge at that moment.
- The comparison interest rate is based on a similar fixed interest rate period. In case the credit offeror does not offer a similar fixed interest rate period, the credit offeror will use the highest adjacent interest rate.
- The contract interest rate and the comparison interest rate should be based on the same the Loan to Value ratio.
- At the moment of redemption, the contractual repayment schedule of the borrower will be taken into account.
In the Guidelines it is noted that the principles are applicable to all early repayments as of 14 July 2016, also in relation to mortgage loans entered into prior to 14 July 2016.