The Housing and Construction Authority loans can be shortened or extended for 5, 10, 15, 20, 25, 30 or 35 years.
A fee is charged in the case of shortening a loan's repayment schedule with a provision for a settlement fee.
Loans must be fully repaid in order for an extension or shortening of the credit period.
When assessing the payment burden, it is important not to look only at the next 12 months period, because some loans may be paid off before others. It is therefore better to compare the average payment over the entire credit period.
If payment difficulties assistance is requested and the relevant conditions are met, the loan can be extended by up to 30 years, but the maximum loan period may not exceed 70 years.
If the shortening of the credit period leads to an increase in the payment burden by 20% or more, the borrower's payment capacity must be reassessed according to Act no. 118/2016 on real estate loans to consumers.
The effect of shortening or extending a loan.
Shortening
- Higher monthly payment burden to begin with
- Lesser interest burden of the loan in total
- Fewer maturity dates for payment
Extending
- Lower monthly payment burden to begin with
- Higher interest burden on the loan in total
- More maturity dates for payment
For each extension/shortening, a fee is charged according to the tariff on each occasion. It is added to the loan and will be collected on its next due date.