Some Czech banks still punishing mortgage clients for early repayment

by   CIJ Linguistics
2020-07-28   08:11

A law passed at the end of 2016 made it illegal for banks to charge its mortgage loan customers huge fines for paying off their loans earlier than agreed. But the daily Hospodarske noviny reports that some banks are using the vaguely worded law to their own advantage and charging customers tens of thousands of koruna, sometimes more than CZK 100,000 to pay off their loan. That's a serious issue for many customers at this moment. Low interest rates and a collapsing economy have convinced many consumers either to to refinance their loans and others to reduce their household level of indebtedness. It's also a problem for people who need to buy a new home, but need to sell their current home to do so. The law says that banks are no longer allowed to punish their clients for ending a loan period early by charging them intentionally created expenses. Banks such as Ceska sporitelna, Komercni banka, Raiffeisenbank and Moneta told the newspaper they were following the intention of the law rather than exploiting its loose wording. But the newspaper reports that it was contacted by a reader who said he had been forced by Komercni banka to pay tens of thousands of koruna in charges. CSOB and Unicredit said they were acting under the original contractual agreements made with their clients.