Terminating a mortgage

I would like to terminate my mortgage. How should I go about this? What should I watch out for?

Greetings,

The first thing you need to pay attention to is the mortgage term (fixed and LIBOR mortgages). When you use a fixed mortgage, the interest rate is fixed for a certain period of time.

In principle, any mortgage can be terminated ahead of schedule, including a fixed mortgage. However, by terminating a fixed mortgage you will normally incur penalty charges. These may include an early-termination fee, administrative fees and a charge equal to the interest which would have been paid over the loan term.

The high cost of terminating mortgages usually invalidate the savings potential of switching to a cheaper mortgage. This makes refinancing before the end of your loan term a bad financial move in most cases, although you need to judge each case individually.

Variable mortgages can generally be terminated after a relativel short notice period (often just 6 months).

Best regards from Moneyguru
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