Early repayment of a mortgage whether full or partial can represent an excellent opportunity to save, but the applicable conditions vary depending on the type of property and the agreed interest rate.
PRIMARY RESIDENCE – VARIABLE RATE
- Fee: 0% (temporary exemption until 31 December 2025)
- Legal Basis: Decree-Law No. 80-A/2022
- Applicable to: Variable rate contracts (e.g., indexed to Euribor) for primary residences
- Benefit: Allows partial or full repayment without paying a fee
- Advantage: Reduces the total interest paid and the term of the loan, with no additional costs
Sublime Insight:
If you have available savings, this is an ideal moment to reduce outstanding capital, taking full advantage of the fee exemption.
PRIMARY RESIDENCE – FIXED RATE
- Fee: Up to 2% of the repaid capital
- Applicable to: Fixed-rate contracts
- Rationale: The fee compensates the bank for lost future interest due to early repayment
- Advantage: Predictable repayments, but less flexibility to repay without cost
Sublime Insight:
Early repayment only makes financial sense if the interest savings exceed the 2% fee..
SECONDARY RESIDENCE OR INVESTMENT PROPERTY – VARIABLE RATE
- Fee: 0.5% of the repaid capital
- Applicable to: Variable rate loans for a second home or investment property
- Note: The 0% exemption does not apply to this type of mortgage
- Advantage: Reduced fee, though still a cost to consider
Sublime Insight:
Even with a 0.5% fee, early repayment can be advantageous for those wishing to reduce debt or exposure to interest rate fluctuations.
SECONDARY RESIDENCE OR INVESTMENT PROPERTY – FIXED RATE
- Fee: Up to 2% of the repaid capital
- Applicable to: Fixed-rate contracts for second homes or investment properties
- Advantage: Greater stability in repayments, but no exemption for early repayment
Sublime Insight:
In a declining interest rate environment, it may be more efficient to refinance or transfer the loan rather than repay with a fee.
COMPARATIVE SUMMARY – EARLY REPAYMENT CONDITIONS
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SUBLIME MORTGAGE OPINION
For holders of variable-rate mortgages on primary residences, 2025 represents a unique opportunity to repay without costs.
Holders of fixed-rate mortgages or loans on secondary residences should carefully assess whether the potential savings outweigh the fee applied.
Sublime Mortgage provides:
Advice on alternatives such as renegotiation or mortgage transfer
📩 Contact us to discover how early repayment could be advantageous for your situation.
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