According to the mortgage law, if a borrower has delayed four or more payments on a loan within a year, the bank has the right to demand early repayment of the debt and seize the mortgaged property through the court—even if it is the borrower’s only property.
Can a bank force a borrower to repay the mortgage early due to delays on a consumer loan?
No. Debts on two different loans are not related, even if they were taken out at the same bank.
A bank has the right to demand early repayment of a mortgage only if you:
- Delayed payments specifically on that mortgage loan;
- Refused insurance on the collateral (or if the policy expired) and did not arrange a new insurance contract within 30 days;
- Sold or gifted the mortgaged property without the bank’s consent;
- Grossly violated the rules for using, maintaining, or repairing the property.
Delinquent payments on other loans cannot be a reason for claims on the mortgage. However, if you do not repay a consumer loan, the bank may go to court or a notary, obtain an enforcement document, and start deducting the amount owed from your accounts. This could leave you without enough money to make mortgage payments.
What should you do if you don’t have enough money to pay the mortgage?
In a difficult situation, you have the right to take a break—deferring payments on the loan for six months. You can pause the mortgage even if you already have overdue payments. For more details on when you can shift the repayment schedule, read the article “How to Get Mortgage Holidays.”
If the terms of the holiday are not met, or if your financial situation does not improve after six months, you can ask the bank to restructure the loan. This means changing the repayment schedule, such as temporarily reducing the payments and extending the repayment term. Many banks have their own restructuring programs, and they are willing to work with borrowers.
When neither the holiday nor the restructuring could be arranged, you may sell the mortgaged apartment or house yourself. The creditor must agree to this option if the proceeds are enough to fully pay off the mortgage debt.
The buyer will transfer the property’s price not to you but to the bank. First, these funds will go towards repaying the mortgage loan, and any amount exceeding the debt will be paid to you. It’s possible that the difference will be enough to buy another property or at least make a down payment on a new mortgage with a lower payment.
It’s important to seek holidays, restructuring, or permission for independent sale of the property before the bank starts foreclosure proceedings through the court.