Brendan Burgess
Founder
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The Irish government has to transpose the Mortgage Credit Directive into Irish law. The Department of Finance has a consultation process on some issues where the government has discretion. This is one of the most important areas and I am keen to make a submission which would reflect all sides of the argument.
Discretion 24 – Early repayment of loans (Article 25)
The Directive ensures the right of the consumers to repay the loan early if they so wish. If consumers do repay early they will be entitled to a reduction in the total cost of the credit. This reduction would consist of the interest and the costs that would have accrued over the remaining duration of the contract.
The following discretions may be applied to the right to repay early:
Ireland may provide that the exercise of the right to repay early is subject to certain conditions. Such conditions may include time limitations on the exercise of the right, a different treatment depending on the type of the borrowing rate or depending on the moment the consumer exercises the right, or restrictions with regard to the circumstances under which the right may be exercised.
Consultation Question 24(a): Should Ireland set conditions on early repayment? If yes, please provide suggestions and your reasons for them.
Consultation Question 24(b): Should Ireland provide that creditors can charge for early repayment subject to the restrictions outlined above? If so, why?
Where the early repayment falls within a period for which the borrowing rate is fixed, Ireland may provide that the exercise of the right to repay early is subject to the existence of a legitimate interest on the part of the consumer.
Consultation Question 24(c): Do you think Ireland should adopt the above discretion? If so, why?
Discretion 24 – Early repayment of loans (Article 25)
The Directive ensures the right of the consumers to repay the loan early if they so wish. If consumers do repay early they will be entitled to a reduction in the total cost of the credit. This reduction would consist of the interest and the costs that would have accrued over the remaining duration of the contract.
The following discretions may be applied to the right to repay early:
Ireland may provide that the exercise of the right to repay early is subject to certain conditions. Such conditions may include time limitations on the exercise of the right, a different treatment depending on the type of the borrowing rate or depending on the moment the consumer exercises the right, or restrictions with regard to the circumstances under which the right may be exercised.
Consultation Question 24(a): Should Ireland set conditions on early repayment? If yes, please provide suggestions and your reasons for them.
Consultation Question 24(b): Should Ireland provide that creditors can charge for early repayment subject to the restrictions outlined above? If so, why?
Where the early repayment falls within a period for which the borrowing rate is fixed, Ireland may provide that the exercise of the right to repay early is subject to the existence of a legitimate interest on the part of the consumer.
Consultation Question 24(c): Do you think Ireland should adopt the above discretion? If so, why?