as I am in the process of buying a home, i am speaking to the bank about mortgages. it turns out that the rate for a 30year mortgage is lower than for a 10 year one. The bank allows early payment- there is no penalty.

Which made me wonder- could i take out a 30 year mortgage and pay it off in 5 or 10 years, benefiting from the lower interest rate? or is there a catch?

since the mortgage is small there should not be a problem for me to pay it off sooner rather than later- depending on how the EUR-USD exchange rate develops i might be able to do it very quickly


thanks

I personally took a 10 year mortgage with the idea of paying it off when the Euro / Dollar exchange rate changes. I not think my bank has any catch ... ( I hope so ) ... Are you going through a 'normal' Italian bank ? CJ on this forum might have some ideas

I am using Woolwich/Barclays...

Visit or Contact Ugo Vagniluca at www.lifeinitaly.it and check out the rates http://www.romesavings.com/home/rates.mortgage try to negotiate a no penalty clause for paying your mortgage earlier, depending on your relationship with the bank some do not charge a penalty but must be negotiate prior to signing the mortgage documents.