Prepayment penalty

  • Erstellt am 2014-04-01 18:45:24
T

toxicmolotof

2014-04-02 17:11:10
  • #1
I agree with the previous poster. The only debatable point possibly is the method of calculation, whether reinvestment or re-lending forms the basis of calculation. But here, the borrower must prove to the bank that the actual damage caused by re-lending and/or risk reduction through reinvestment instead of credit was lower.
 
N

nordanney

2014-04-02 17:33:41
  • #2


This is currently the case at Dr. Klein:
Fixed interest termFixed nominal interest rateEffective annual interest rate
5 years1.471.48
10 years1.941.96
15 years2.552.58
20 years2.832.87

The vdp rate as of 01.04. was 1.936% for 10 years and 2.412% for 15 years – how is my employer (mortgage bank) supposed to make money here? Risk premiums not considered, since this is a real estate loan. What is missing, however, are liquidity costs that we also incur...
 
T

toxicmolotof

2014-04-02 22:53:12
  • #3
I want to see the customer who actually gets 1.94 as RK and the bank that then refinances at 1.93. (both of course viewed over 10 years)

Either the bank buys cheaper or the customer rate is higher. Or the bank has no other choice, but I would honestly feel sorry for the bank in that case. Because then it has a problem. (Which brings us back to "hand-to-mouth".) Close the shop and wind down. Living solely from maturity transformation and CS commissions, I'm not sure how long that can go well.
 
N

nordanney

2014-04-03 13:37:15
  • #4
That doesn't work well for long either, but it is very often done by commercial banks. The best example of a bankruptcy case is Hypo Real Estate, which went down the drain due to maturity transformation. It should still be in everyone's memory - keyword rescue umbrella.
 
S

Steffi33

2017-11-10 18:35:54
  • #5
We sold our old house.. therefore the loan ends prematurely for us as well. We have a similar problem as the original poster (prepayment penalty).. But... we are supposed to pay even more interest than the prepayment penalty, than what would actually be due! I find that quite bold!

The facts:
Contract ends on 30.11.2017 (our contract would have run until 31.07.2018)
Outstanding balance today 84,300 EUR
Effective annual interest rate 0.65%
Prepayment penalty 539 EUR

So it concerns 8 months (December to July).
I come to an interest amount of about 365 EUR, which the bank loses.
But we have to pay 539 EUR (only the prepayment penalty!)

What do you think about that?
Best regards, Steffi
 
T

toxicmolotof

2017-11-10 20:09:35
  • #6
That someone there can't do math. Or is very good at math.

1) I would not accept it and at most pay the interest.

2) Presumably, the additional interest is due to the fact that the bank can only invest the prematurely returned money with negative interest rates. At least I expect this argumentation as part of the calculation.
 

Similar topics
30.10.2008Credit vs Cash Payment15
25.01.2014Financing: Restructuring of KfW loan for the condominium18
11.07.2015480,000 loan too high, experiences?36
10.08.2016Assessment of financing condominium in Düsseldorf - Thank you!14
27.03.2017Forward loan - Secure interest rates now?53
30.04.2020KfW153 loan immediate repayment - prepayment penalty?24
03.07.2023Finance and buy or continue renting in the Stuttgart area?72
06.03.2022Interest rate trend showing downward due to the Ukraine crisis?15
10.05.2022Buy a house with equity and loan, renovate through property sale24
29.09.2022High interest rates with fixed interest, alternative flex loans?54
17.04.2025Prepayment Penalty for Loans vs. Current Interest Earnings112
22.03.2024Home purchase financing despite high interest rates?24

Home financingHouse construction planningShell construction
Interior constructionCompanies and their work / products
Renewable energiesBuilding technology
Exterior facilitiesFlooringIKEA
Oben