Is there any way to get out of a mortgage with >6% rate of interest which was fixed for 10 years (I am in my 5th year)? The only option that my mortgage provider bank provides, consists of a >30K euro penalty. Are any other legal recourse?
In a typical Dutch mortgage, you can only pay off or refinance the entire mortgage without paying a penalty if:
- Your fixed interest period is about to expire
- You sell the house or are foreclosed on
- One of the people on the mortgage dies
- The mortgage has been paid off through the normal payment process
- The interest rate for new mortgages is higher than your current mortgage
- Your house is damaged to the point it has become unliveable
Of those, your best bets are to wait the remaining 5 years or to sell the house if you want to get a new mortgage with a lower interest rate without paying a penalty.
There's always a small chance that your mortgage provider may make an exception for you or reduce the penalty based on your circumstances. It's best to contact your mortgage broker or the provider directly to discuss this. If your mortgage is an "Interest Only" mortgage, you may have marginally better luck with attempting to convert to an annuity mortgage.
Other options include:
- Repay a small part of your mortgage each year. Typically you can repay 10% each year penalty-free, but the percentage varies and there may be some other constraints depending on the type of mortgage you have. Speak with your mortgage broker/provider.
- Look into refinancing with a provider that offers "rentemiddeling" (Thanks @Karl) as an option to spread the cost out over a longer period of time. You won't get the market interest rate, but you may still end up with a lower rate that is acceptable to you.