Terminating your mortgage: model letter and tips

1. Terminating your mortgage: notice periods vary

Are you planning to switch to a different lender or type of mortgage? Check the notice periods and the terms that apply to early termination. These may can vary depending on the mortgage type and lender.

If you terminate the mortgage early, then depending on the model and minimum term you must expect to pay additional costs, i.e. an early repayment penalty. Contact your current mortgage lender to find out exactly what conditions apply.

2. Terminating a fixed-rate mortgage

A fixed-rate mortgage has a set maturity date. Check your mortgage agreement to see whether or not you are also required to give notice. Some lenders will otherwise convert the loan automatically to a variable-rate mortgage.

Terminating a fixed-rate mortgage at the end of its term

If you are cancelling your mortgage you should start looking for an alternative as soon as possible. Begin around 15 months before the old mortgage matures to put you on the safe side and in a good negotiating position.

Terminating a fixed-rate mortgage early

You are usually only able to terminate your mortgage early if you pay an expensive early repayment penalty. This may amount to several tens of thousands of francs.

The early repayment penalty if you repay your mortgage outside of the set dates is calculated from the difference between the interest that you would have paid up to the end of the term of the agreement and the income that the bank could have obtained from reinvesting the repaid loan. Mortgage providers generally also charge administration fees.

3. Terminating a Saron mortgage

Saron mortgages can be terminated as at their maturity date. As a general rule the notice period is 3 to 6 months. Terminating an existing mortgage outside of these dates is commonly punished in the form of an early repayment penalty.

If you want a new mortgage, start looking around 6 to 9 months before the current one matures.

It's good to know that many lenders allow you to switch to a fixed-rate mortgage without paying the penalty, providing you stay with them.

4. Terminating a variable-rate mortgage

There is no fixed term for a variable-rate mortgage.You can therefore terminate and repay it relatively easily. You just need to observe the notice period, which is usually 3 to 6 months.

Here, too, you should look for an alternative mortgage as soon as possible. Start around 6 to 9 months before the cancellation date.

5. Terminating your mortgage: model letter

Are you looking to cancel your mortgage? Comparis offers a model mortgage termination letter. Send the letter by registered mail so that you have a record that it has been delivered.

You can also use the Comparis mortgage service. It gives you the option of subscribing for a termination reminder or to receive regular interest rate updates.