Early Repayment Fee
A commission a bank may charge a borrower for repaying a mortgage loan ahead of the agreed schedule, tightly restricted by Polish law and, for variable-rate loans, only allowed for a limited period after the loan is granted.
Сфера дії: Польща.
Визначення
An early repayment fee (prowizja za wcześniejszą spłatę, also called a prepayment compensation) is a charge some mortgage agreements allow the bank to collect when a borrower repays all or part of the loan before its scheduled term. The Act of 23 March 2017 on Mortgage Credit, implementing EU consumer-credit protections, significantly limits when and how this fee can be applied.
For a mortgage loan with a variable interest rate, the bank may only charge an early repayment fee for a limited initial period after the loan agreement is signed, and only to cover its actual, documented costs directly connected to the early repayment — it cannot be an arbitrary penalty. After that initial period elapses, a borrower with a variable-rate loan generally has the right to repay early free of charge. Loans with a fixed or periodically-fixed interest rate are typically subject to different, usually broader, rules on prepayment compensation for the period the fixed rate applies.
Because the exact rules and thresholds can be technical and are set out precisely in the loan agreement itself, borrowers planning a partial or full early repayment should check their specific contract terms — or ask the bank directly — before assuming a repayment will be free of charge.
Приклади
A borrower with a variable-rate mortgage receives an inheritance and repays the loan in full a few years after taking it out, past the period during which the bank could charge an early repayment fee, and pays nothing extra.
A borrower who wants to make a large overpayment shortly after signing a variable-rate mortgage checks their loan agreement and finds the bank is entitled to charge a fee covering its documented costs for that early period.
A borrower with a periodically-fixed rate mortgage discovers that repaying early during the fixed-rate period triggers a different prepayment compensation than would apply once the loan reverts to a variable rate.
Як це впливає на купівлю та продаж
Borrowers who expect to sell the property, refinance, or come into a lump sum of cash within the first few years of the loan should check the early repayment terms in their specific agreement before signing, since these terms vary by bank and by rate type and directly affect how much flexibility the borrower has to pay off the loan without penalty later.
