Can you pay off a fixed rate loan early?
If you have the money, you can completely repay your fixed-rate interest mortgage loan, but sometimes there are consequences and fee penalties that can hurt your wallet and surprise you if you are unaware. Break costs and fees are painful because they have two parts. One is the base of the fee, which is never more than $1,200. Sometimes, banks and lenders will waive this part of the fee, however, the interest charge is expensive and can be as high as $10,000 depending on the terms of your loan. The higher the interest rate, the more money you have to pay.
Think long and hard if it is worth it to repay your loan before the term is complete. Sometimes, it is best to continue making repayments on your fixed-interest term. As soon as it transitions to a variable interest rate term, you can then choose to pay it completely. Even making a large partial repayment can increase these break costs.
Technically, nothing can stop you from paying your loan completely, but it is a good idea to first run the idea by a lending expert at your financial institution. Mortgage House lenders are only a call away if you have questions! If you want a mortgage, our lenders can assist you in finding a perfect package for you with competitive interest rates.
Paying Fixed-Rate Loans Early Conclusion
In conclusion, you do have the option to pay your loan completely and early, but this is technically breaking the fixed-interest mortgage contract. You may need to pay a penalty or break fee.