The maturity of the mortgage loan ranges from 5 to 45 years. Applicants should be of working age throughout the repayment period. If the repayment period would interfere with retirement age, it is usually necessary to add another (younger) co-borrower to the loan.
The longer the loan maturity, the lower the installment. The optimal time to repay a mortgage loan is 15-20 years when the ratio between installment and credit costs is best. Banks prefer maturity in multiples of five years, but they also accept other maturities.
Mortgage loan repayment
Mortgage loan repayment depends on how it is drawn. The loan can be drawn in one or more steps.
If a mortgage loan is drawn gradually, only interest on the drawn amount is repaid monthly, until the entire loan is exhausted. Upon completion of the drawdown, the borrower will begin to repay the mortgage loan mostly by annuity installments, which are the same throughout the interest rate period and contain principal and interest.
Some banks also allow other repayments than repayment by annuity payments. It is a degressive or progressive repayment, ie the number of installments is either decreasing (degressive) or increasing (progressive) over time.
The maturity date for each installment is set out in the loan agreement.
On the date when the interest rate changes (the client chooses the interest rate in the years), the borrower may repay the loan amount or the entire amount without penalty. In the event of an extraordinary repayment by the client outside these deadlines, most banks impose high penalties for early repayment.
In the case of a non-specific mortgage, which falls under the Consumer Credit Act (No. 321/2001 Coll.), An extraordinary installment of part or all of the loan can be made at any time.
What about mortgage after fixation? Don’t worry about refinancing
In connection with the increasing basic interest rates, the issue of mortgage loans is a very thorny issue today. Young people with average incomes do not reach it many times, and many of those who have already been granted credit is now addressing the path to choose when the period of fixation is over. If you are among them, in the following article you will find out what your options are. Council number one is: refinance is definitely not afraid.