The bank, in the event of repayment incidents of a mortgage, cannot capitalize late interest because it must be provided for in the contract.
The addition of late interest to the remaining capital due is certainly provided for by the Civil Code but it would be contrary to the Consumer Code which prohibits, in the event of early repayment, imposing compensation or additional costs, indicated the Court of cassation. The judges thus ruled in favor of a borrower who thought of acquiring new apartments for rental but had not succeeded in honoring his chances of a loan.
Increase in amounts reimbursed
The capitalization of late interest causes an increase in the sums to be reimbursed and the consumer code strictly lists the indemnities or compensation that the professional lender can claim in the event of late payment, explained the magistrates.
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No compensation or cost other than these can be charged to the borrower when, following failures in repayments, the bank requires early repayment, as stated in the Consumer Code.
(Cass. Civ 1, 22.3.2023, A 21-14.666).
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