MCOB 12.3 Early repayment charges: regulated mortgage contracts2

A firm must ensure that any regulated mortgage contract that it enters into does not impose, and cannot be used to impose, an early repayment charge other than one that is:

1. (1)

   able to be expressed as a cash value; and

2. (2)

   a reasonable pre-estimate of the costs as a result of the customer repaying the amount due under the regulated mortgage contract before the contract has terminated.

Before:

1. (1)

   entering into a regulated mortgage contract with a customer; or

2. (2)

   making a further advance on an existing regulated mortgage contract; or

3. (3)

   changing all or part of a regulated mortgage contract from one interest rate to another;1a firm must disclose to the customer:

   1. (a)

      in the illustration provided in accordance with MCOB 5, MCOB 7.6.7 R, MCOB 7.6.18 R, MCOB 7.6.22 R, MCOB 7.6.31 R, or MCOB 9; and

   2. (b)

      in the illustration provided as part of the offer document in accordance with MCOB 6.4.1 R(1) and MCOB 9.5;

   the maximum amount payable as an early repayment charge in respect of that regulated mortgage contract, if an early repayment charge applies.