European UnionI want to switch mortgage providers but face excessive exit fees. Does EU law limit these?
Yes, EU law limits mortgage exit fees through the Mortgage Credit Directive, which caps early repayment charges at 1% or 0.5% of the outstanding amount depending on remaining term.
What the Law Says
The EU Mortgage Credit Directive (MCD) sets binding limits on early repayment charges (exit fees) for residential mortgages across all EU Member States.
The Mortgage Credit Directive (Directive 2014/17/EU) applies to credit agreements secured by a mortgage or similar security on residential immovable property. It entered into force on 20 March 2014 and became applicable in national law by 21 March 2016.
Article 18(1) of the Directive explicitly restricts early repayment charges to ensure they are 'fair, transparent and not disproportionate'. It mandates that such charges must not exceed 1% of the outstanding amount if the early repayment occurs more than one year before the end of the agreed term — and 0.5% if it occurs within one year.
Member States were required to transpose this rule into national law, meaning borrowers in all EU countries benefit from this cap on exit fees for mortgages concluded on or after 21 March 2016.
Statutory TextWhere the consumer repays all or part of the credit early, the creditor shall be entitled to receive compensation for the early repayment only where the early repayment occurs within the period during which the interest rate is fixed and only to the extent that the compensation does not exceed 1 % of the amount repaid early where the period remaining until the end of the period during which the interest rate is fixed is longer than one year and 0.5 % where that period is of one year or less.
— Directive 2014/17/EU, Art. 18(1) — Early repayment
What to Do
Check your mortgage contract date: the MCD cap applies only to agreements signed on or after 21 March 2016.
Confirm whether your loan has a fixed-rate period — the cap only applies during that period.
Request a written breakdown of the exit fee from your lender, citing Article 18(1) of Directive 2014/17/EU.
If the fee exceeds 1% (or 0.5%), file a complaint with your national financial ombudsman or competent authority (e.g., BaFin in Germany, CNB in Czechia, FCA in UK pre-Brexit).
Keep records of all correspondence — you may escalate to the European Commission’s SOLVIT service if national remedies fail.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.