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View Full Version : Is it the norm to pay 1% to redeem a mortgage in Tenerife?



Suej
13-04-2012, 14:48
I was told that to pay off a mortgage here that the Banks always charge 1% redemption fee! Anyone know if this is standard practice please?:thanx:

dede
13-04-2012, 14:52
I was told that to pay off a mortgage here that the Banks always charge 1% redemption fee! Anyone know if this is standard practice please?:thanx:

Well dont ask CIM as he'll tell you to go take a look at the banks website!!!!

Suej
13-04-2012, 15:04
Well dont ask CIM as he'll tell you to go take a look at the banks website!!!!

Can't be doing with that dede!:spin: can never understand the Bank jargon!

golf birdie
13-04-2012, 15:15
I believe this is standard practice in Spain.

Suej
13-04-2012, 15:20
I believe this is standard practice in Spain.

Hmmm! I would think that this is probably applicable in Tenerife too then! Hmmmm! not what I was lead to believe by Barclays when I was contemplating getting a mortgage!

doreen
13-04-2012, 15:23
I was told that to pay off a mortgage here that the Banks always charge 1% redemption fee! Anyone know if this is standard practice please?:thanx:

I believe it is the norm unless negotiated otherwise ... there could be the possibility the mortgage provider would allow you pay a particular (large) amount off the balance now, and then only charge the 1% on the remaining balance to be cleared when selling the property/cancelling the mortgage. Basically talk to the bank is the right advice :)

Suej
13-04-2012, 15:40
I believe it is the norm unless negotiated otherwise ... there could be the possibility the mortgage provider would allow you pay a particular (large) amount off the balance now, and then only charge the 1% on the remaining balance to be cleared when selling the property/cancelling the mortgage. Basically talk to the bank is the right advice :)

The person I have been discussing it with said that they were told that if they wanted to redeem their mortgage at any time there would be no fees or penalties to pay but I have told them to check that as far as I could remember that a 1% fee was normally charged! I feel I have probably given them correct information in general terms at least. :)

casabonny
13-04-2012, 16:45
The escritura de hipoteca will tell them exactly the terms and conditions of redeeming a mortgage.Most banks do charge a 1% cancellation fee but as Doreen says there is sometimes an option to pay off a large sum before hand then only pay the 1% on the balance.Some banks ( Caja Canarias I know for sure ) only allow you to pay in a lump sum, a proportion of the capital each year if you want to eg say you can pay 10000 in Dec 2012 and then 10000 in Jan 2013 but no more unless cancelling in total .
Legally its whats in the Estcritura de hipoteca but I would think that due to so many banks merging you may be able to negotiate slightly different terms.

TenerifeTeddy
13-04-2012, 17:07
It is certainly standard practice with Banca March and Santander Bank. When we paid off our Santander mortgage we had to pay the 1% charge and were advised by BM that they charge 1% when paying any chunk of capital off the mortgage. A real disincentive to trying to pay it off early, unless you do it all in one go.

CIM
13-04-2012, 17:18
Well dont ask CIM as he'll tell you to go take a look at the banks website!!!!
What are you wittering on about now? Why not try to actually add something pleasant or useful to this forum over the next 24 hours...? Or is that asking too much?

By law the maximum redemption on a standard mortgage during the first 5 years is 0.5% for full or partial repayments. After 5 years, the redemption applicable on a standard mortgage is 0.25% for full or partial repayments. Where this may vary is:

If the mortgage was taken out before this law was changed to what it is now
if you are on interest only
If you are on a fixed rate of more than 1 year.

Angusjim
14-04-2012, 07:53
Well dont ask CIM as he'll tell you to go take a look at the banks website!!!!

Andy she is quite a fan of yours :laugh: now don't you go starting you own Forum because she is stalking you now :tiphat::bootyshake:

atlantico
14-04-2012, 11:51
our mortgage contract states 0.5% fee, minimum lump sum at any time to be at least 10% of outstanding amount. So, tell them to read their contract

CIM
14-04-2012, 14:04
our mortgage contract states 0.5% fee, minimum lump sum at any time to be at least 10% of outstanding amount. So, tell them to read their contract

Wow - those are VERY bad terms, why on Earth did you agree to them??!

atlantico
14-04-2012, 15:33
what ? pay off €10k, and pay a €50 fee ? or €100k and pay €500. Thats reasonable to me !

CIM
14-04-2012, 15:56
Nah, I read it as a 10% redemption fee which looked rather unreasonable!

karlburn
14-04-2012, 16:02
Nah, I read it as a 10% redemption fee which looked rather unreasonable!

Me too...........

atlantico
14-04-2012, 16:26
our mortgage contract states 0.5% fee, minimum lump sum at any time to be at least 10% of outstanding amount. So, tell them to read their contract

I've read it again, and thats not how it reads. 0.5% fee is quite clear, not 10%. They won't allow you to just pay of a small amount, say €500, it has to be at least 10% of total owed. ie. €110k outstanding, minimum lump sum = €11k