How and when can a mortgage be repaid?
- Mortgages without a fixed-term (e.g. variable mortgages) can be terminated and repaid at any time subject to the notice period, which is usually three months.
- Fixed-term mortgages (e.g. fixed-rate or usually also LIBOR mortgages) can be repaid at no additional cost at the end of the contract period.
- You should, however, check the contractual agreements on termination very carefully. In the event of extraordinary termination, you, or possibly also the bank, may have to pay compensation to the other party, depending on the current level of interest rates.
How is the compensation calculated in the event of extraordinary termination?
- It all depends on the terms of the individual agreement. Very often, the compensation is calculated as the difference between the agreed mortgage interest rate and the rate available on termination.
I have several fixed-rate mortgages with different maturities. Can I still switch them?
- Yes, this is possible. Since the mortgage notes acting as collateral are often not tied to individual mortgage tranches, they can either be released early to the repaying bank in exchange for a promise to pay, or divided up, which will result in certain costs (generally borne by the client).
We will be happy to support you when you repay your mortgage and switch to UBS. Please arrange a consultation with one of our client advisors.