Question 1

How can I calculate real savings from early mortgage repayment?

Accepted Answer

Our simulator accurately calculates: 1) Prepayment penalties (capped at 3% of remaining principal under the Chatel law), 2) Interest saved, 3) Net gain after penalty deductions. It also compares full repayment, partial repayment, and term reduction.

Question 2

Why do banks charge early repayment penalties?

Accepted Answer

Banks use these fees to offset lost interest income. The law strictly limits them: a maximum of 3% if the loan is under 10 years old, and 1% beyond that. Certain loans (e.g. government-subsidized) are exempt.

Question 3

What’s the average savings from early repayment?

Accepted Answer

For a $200,000 loan at 2% over 20 years: 1) Repaying after 10 years saves around $15,000 (after penalties), 2) A $50,000 partial repayment saves about $8,000. Actual savings depend on your loan’s age and interest rate.

Question 4

When is early repayment most beneficial?

Accepted Answer

Best moments: 1) Early years of the loan (when interest makes up 70% of payments), 2) If your rate is above 3%, 3) If your savings earn less (after tax) than your loan's interest. Our simulator detects these scenarios automatically.

Question 5

Can early repayment penalties be negotiated?

Accepted Answer

Yes—40% of cases according to the ACPR. Leverage points: 1) Offer a new investment to the bank, 2) Request a proportional reduction based on remaining capital, 3) Mention moving all your accounts elsewhere. Our tool includes a negotiation simulator with estimated success rates.

Question 6

What’s the difference between full repayment and term reduction?

Accepted Answer

1) Full repayment instantly clears your loan (ideal when selling). 2) Term reduction keeps your payments the same but shortens the duration (average interest savings: 18%). 3) Lowering monthly payments is another option. The simulator compares all three in real time.

⏱️ Early Repayment

ActiveBudget: Simplified Financial Mastery

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