News from the world of finance: It will be possible to make extraordinary loan repayments monthly and free of charge
At its last meeting, the National Council of the Slovak Republic approved a change that will allow clients to repay their mortgage exceptionally once a month starting in September of this year. Until now, it was possible to make such installments free of charge only once a year, on the anniversary of the rate fixation. By changing the law on housing loans, this limit will also increase from 20 percent of the remaining principal to 30 percent per year, regardless of the anniversary of the rate fixation.
However, the banks warn that they will have to adjust their information systems for this change and monitor the paid extraordinary installments every month. It is precisely because of this change that clients may lack a clear idea of the payment amount for the next month or the final maturity of the mortgage. The banking association points to the possibility that clients will have to decide whether to reduce the amount of the installment and keep the original maturity, or to maintain the amount of the installment and adjust the final maturity.
And who will pay the fees? Apparently, we are at risk of a possible increase in interest rates for all clients. That was also the case with insurance companies. Unfortunately, the impact of this legislative amendment will probably affect all clients. Or would NOT?
This new possibility of monthly extraordinary installments may change the approach to annuity repayment of the loan, but the opinions of banking analysts differ. You will soon find out how our clients appreciate this change in a survey we are preparing on social networks. We will be happy if you join us. Thank you in advance.
Writen by: Mária Cillerová, RSc., Suorce: Forbes
