Cost Reduction in the Event of Early Repayment Under the Mortgage Credit Directive: A Surprising U-turn After Lexitor
Abstrakt
One of the important features of consumer credit law is the right of the consumer to early repayment, leading to a corresponding reduction in the total cost of the credit. Both Article 16(1) of the Consumer Credit Directive (CCD) and Article 25(1) of the Mortgage Credit Directive (MCD) provide for "such reduction consisting of the interest and the costs for the remaining duration of the contract".
At first glance, it appears that both provisions, having the same wording, are to be interpreted identically. Therefore, it seemed like a safe bet that the question if costs that are independent of the duration of the credit shall be included in the reduction will be answered in the same way regarding consumer credits and mortgage credits to consumers.
In the 2019 Lexitor judgment the Court of Justice of the EU (Court, ECJ) had decided that under the CCD "the right of the consumer to a reduction in the total cost of the credit in the event of early repayment of the credit includes all costs imposed on the consumer." In UniCredit Bank Austria AG in essence the same question was brought before the Court in the context of the MCD - and as a surprise for many observers (including the authors) the Court decided in the opposite way.