Article 41(3) of Ordinance 52/2016 prohibits charging a penalty, compensation or any cost for early repayment of a housing loan, even at a fixed rate.
On a partial repayment the law lets the customer choose: shorten the term, reduce the instalment, or combine the two.
100,000 lei after 5 years, on a loan of one million lei at 7.12%: about 256,600 lei of interest by shortening the term, against about 87,800 by reducing the instalment.
On consumer loans that are not for housing, under Ordinance 50/2010, a fee of up to 1% of the amount repaid is allowed at a fixed rate.
The old bank charges no penalty. The costs are those of the new loan: file assessment (900 lei at BCR and ING), valuation, notary and insurance.
Early repayment of a mortgage in Romania: the short answer
In Romania, you may repay a housing mortgage at any time, in full or in part, without a penalty. Emergency Ordinance 52/2016, which applies to consumer loans for buying a property, provides in Article 41 that the bank may not charge a penalty, compensation or any other cost for early repayment, nor make it conditional on a minimum amount. On a partial repayment you choose: shorten the term, reduce the instalment, or both. Refinancing with another bank is an early repayment funded by a new loan, and costs only the costs of the new loan. Correct as of October 2026.
As Israelis, we are used to hearing "early repayment" and immediately thinking of a prepayment (capitalisation) fee. So when investors ask me about it, I start with the good news: in Romania, on a housing mortgage, the rule is simpler. But there are a few details worth knowing before you move any money.
What Romanian law provides, article by article
Ordinance 52/2016 transposed the European directive on credit for residential property into Romanian law, and came into force at the end of September 2016. These are the articles that matter to you:
| Article | What it provides | What it means for you |
|---|---|---|
| Article 40 | You may repay at any time, in full or in part, and the total cost falls accordingly | You pay interest only for the period you have the money |
| Article 41(1) | Repayment may not be made conditional on a minimum amount or number of instalments | You can repay small amounts too |
| Article 41(2) | On a partial repayment the customer chooses: shorter term, lower instalment, or a combination | The decision is yours, not the bank's |
| Article 41(3) | No penalty, compensation or cost may be charged for early repayment | Even on a fixed-rate track |
| Article 16(1)(h) | No fee may be charged for a document required for repayment through refinancing | A balance statement for the new bank at no charge |
On a housing loan to a private consumer in Romania, early repayment costs nothing, even when the rate is fixed. This is a significant difference from Israel, where early repayment of a fixed-rate track can trigger a capitalisation fee.
Two caveats. First, this rule is for housing loans. On other consumer loans, under Ordinance 50/2010, a bank may charge up to 1% of the amount repaid on a fixed rate, or 0.5% when less than a year remains. BCR, for example, publishes a 0% fee on mortgages, fixed and variable, and a tiered fee on fixed-rate personal loans. Second, a loan signed before Ordinance 52/2016 came into force may be subject to the old rules. Check your contract.
Shortening the term or reducing the instalment: a worked example
Assume a loan of 1,000,000 lei over 25 years, at a variable rate of 7.12% (the full variable rate ING Romania publishes in October 2026). The instalment: about 7,145 lei a month. After five years the outstanding balance is about 913,000 lei, and you repay 100,000 lei.
| Option | Monthly instalment | Remaining term | Interest saved (estimated) |
|---|---|---|---|
| No repayment | about 7,145 lei | 20 years | 0 |
| Reduce the instalment | about 6,360 lei | 20 years | about 87,800 lei |
| Shorten the term | about 7,145 lei | about 15 years and 10 months | about 256,600 lei |
Our calculation, for illustration, assuming the rate does not change, before insurance. How to calculate an instalment, in the article on calculating the repayment.
The difference is large: the same 100,000 lei save almost three times as much interest when you shorten the term. On the other hand, reducing the instalment gives monthly breathing room, and sometimes that matters more, for example before retirement or in a period of unstable income.
And the figure that shows this is not theoretical: according to ING Romania, more than half of its mortgage customers make early repayments, and on average they shorten a 25–30 year loan to 12–14 years.
Refinancing a mortgage: what it means in Romania
The law defines refinancing (refinanțare) as early repayment of the loan balance with money from a new loan. In other words, for the old bank it is simply an early repayment, so it may not charge a penalty for it.
On a housing loan to a private consumer in Romania, early repayment costs nothing, even when the rate is fixed.
What does cost money is the new loan. These are the lines to ask the new bank for in writing:
- A file assessment fee. At BCR and ING it is 900 lei according to the banks' websites in October 2026, and is sometimes waived under certain conditions.
- A valuation. BCR publishes a cost of 590 lei.
- The notary and registration of the new mortgage in the land register (ANCPI), and removal of the old charge.
- New life and building insurance, if the new bank requires them.
As for the existing insurance, Article 43 of the Ordinance lets you choose: keep it in force and change the beneficiary, or cancel it and receive a pro rata refund of the premium under the policy terms.
When refinancing really pays
Refinancing is worth looking at in three main situations:
- At the end of the fixed-rate period. This is where the big saving is. At some banks, after three or five years at a fixed rate, the loan moves to a variable rate with a higher margin. At ING, for example, the margin after the fixed period is 2.49% above IRCC, compared with 1.55% on a fully variable track. In the 1,000,000 lei example, switching after five years to a rate of 7.12% instead of 8.06% cuts the instalment by about 500 lei a month. We set this out in the article on fixed versus variable rates.
- When the loan is linked to ROBOR. Older loans are sometimes based on ROBOR, which stood at about 6.06% for three months at the start of October 2026, above the IRCC of 5.57%, according to Economedia. On the difference between the indices, see the article on IRCC and ROBOR.
- When your profile has improved. A higher income, more equity in the property, or moving your salary to the bank can earn you a lower margin.
And the opposite scenario: if only a few years remain, or the rate gap is small, the costs of the new loan can swallow the saving. Refinancing pays only when the monthly saving, multiplied by the number of months remaining, is clearly larger than all the one-off costs.
The Israeli layer: where the money comes from
Most of our readers earn in shekels. Before an early repayment in lei, there are two simple questions:
- The exchange rate. You convert shekels to lei, sometimes via euros. The difference between banks' conversion fees can be significant on sums like these. We wrote about transferring money to Romania in a separate article.
- The opportunity cost. Money that repays a loan at 7% is not working elsewhere. The decision depends on your alternatives, and that is a conversation for a financial adviser, not for an article.
Frequently asked questions
Is there an early repayment fee on a mortgage in Romania?
No, on a housing loan to a private consumer. Article 41(3) of Emergency Ordinance 52/2016 prohibits the bank from charging a penalty, compensation or any other cost for early repayment, even at a fixed rate. On other fixed-rate consumer loans, a fee of up to 1% is allowed.
On a partial repayment, which is better: shortening the term or reducing the instalment?
Shortening the term saves more interest. In our example, 100,000 lei saved about 256,600 lei by shortening the term, compared with about 87,800 lei by reducing the instalment. Reducing the instalment suits those who need monthly flexibility. The law lets you choose.
Can I repay a small amount, for example 10,000 lei?
Yes. The law prohibits the bank from making early repayment conditional on a minimum amount or number of instalments. At most banks you can make a partial repayment through the app as well.
How much does it cost to move a mortgage to another bank in Romania?
The old bank may not charge a penalty, nor a fee for the balance statement needed for refinancing. The costs are those of the new loan: file assessment, valuation, notary, registration of the mortgage and insurance. Ask the new bank for a written breakdown before you start.
When is the best time to look at refinancing?
Mainly towards the end of the fixed-rate period, when the loan moves to a variable rate with a margin set in the contract. Start looking at offers a few months before that date.
The bottom line
In Romania, your money is not locked into the mortgage. You can repay early without a penalty, choose how the loan is adjusted, and switch banks when a better offer comes along. Those who know this in advance choose their first mortgage differently.
If you have a Romanian mortgage, or are about to take one and want to understand the scenarios, book a 30-minute call with me. We will go through the contract or the offer together, and build a list of questions for the bank.
Moti Azulay, Compass Group Romania
Sources and data: Emergency Ordinance 52/2016, Romanian legislation portal (Articles 3, 16, 40, 41, 43) · Emergency Ordinance 50/2010 and the repayment fee on consumer loans, HotNews · BCR, early repayment without a fee · BCR, Casa Mea mortgage · ING Bank Romania, ING Ipotecar · ING Bank Romania, early repayment data (May 2025) · Economedia, IRCC and ROBOR (October 2026) · National Agency for Cadastre and Land Registration (ANCPI).
This article is for general information only and is not legal, tax or financial advice. The rules described apply to consumer housing loans under Ordinance 52/2016; the terms of your loan are set by your contract. The calculations are for illustration only, assuming a constant rate throughout the term.
Now you know more.
This article is general information, not legal, tax or financial advice. Consult local professionals before any transaction.
