EC: ERCs must be fair and justified
Share
Lenders’ Early Repayment Charges much be fair and objectively justified, the European Commission has stated in its Mortgage Directive today.
It says lenders must ensure all consumers have the right to exit a loan prior to its contractual end.
Lenders may impose certain conditions such as time limitations and different treatment depending on the type of the loan.
But it says: “Member states may also provide that the creditor should be entitled to fair and objectively justified compensation for potential costs directly linked to early repayment of the credit.”
If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat
Readers' comments (1)
Baron Bolligrew | 31 Mar 2011 2:53 pm
I'd be interested to see how equity release providers who link their ERC's to gilts will justify this.
Unsuitable or offensive? Report this comment