The following options are available to Applicants:

A: Overpayment options

1 Overpayment option 1: Lump Sum Payments

(i) Lump Sum Payments of any amount (where payment is made by cheque, the cleared funds) will be; (a) credited to the mortgage account thus reducing the loan balance outstanding and either allowing the funding of future Underpayments or Payment Holidays with Overpayments or (b) in the case of Annuity Mortgages applied, at the option of the Applicant, to reduce the loan term or (c) applied, at the option of the Applicant, to reduce the Applicant’s monthly repayments and to continue to repay the loan over the remaining term.

(ii) Interest may be adjusted, in the case of monthly rest accounts, on the first day of the month following receipt of payment of the Lump Sum and in the case of daily rest accounts, on receipt of payment of the Lump Sum.

(iii) Where the Lump Sum Payment is made in respect of a fixed rate mortgage prior to the expiry of a fixed interest rate period, the Applicant shall pay an additional sum calculated in accordance with the conditions relating to fixed rate loans as provided in General Mortgage Loan Approval Conditions applicable to the Applicant’s mortgage. (Please see important information on “Fixed Rate Loans” at the end of the terms and conditions).

(iv) In order to reduce the term of the mortgage or, the monthly repayment, from a Lump Sum Payment, the Applicant must complete the appropriate section in the attached application form.

(v) This option cannot be exercised in conjunction with Underpayments and Overpayments

2 Overpayment option 2: Regular Overpayments

(i) Regular Overpayments may be made monthly or in respect of any other period as agreed with karlsruhe Baden Bank and of any amount.

(ii) The amount of an Overpayment may be added to the Scheduled Monthly or Other Periodic Payment and the total increased repayment will be deducted by direct debit. If no direct debit is in place the repayment arrangements for the Overpayment must be made by the Applicant in a manner satisfactory to karlsruhe Baden Bank.

(iii) All Overpayments will be credited to the mortgage account and interest will be adjusted accordingly.

(iv) The Applicant must pay the loan by Direct Debit or standing order drawn on a karlsruhe Baden Bank account.

B: Preferred Payment Date

The Applicant may elect to change the due date of payment of the Scheduled Monthly or Other Periodic Repayment to any other date of the month in which such payment is due but the Scheduled Monthly or Other Periodic repayment payable thereafter will be increased over the remaining term of the mortgage to take account of the daily amount of interest accrued between the previous date for such repayment and the new preferred date of such repayment. Please note that the exercise of this option may result in additional interest costs over the term of the loan. Your Preferred Payment Date cannot be changed if you are on a flexible repayment option. The date can only be amended once in any billing period.

If the Preferred Payment Date falls on a non-business day, the monthly payment will be payable on the last business day prior to that non-business day.

C: No refunds of Overpayments or Lump Sum Payments

No refunds of Overpayments or Lump Sum Payments will be made to the Applicant when payment thereof is received by karlsruhe Baden Bank.

D: Variation

The Applicant must satisfy the mortgage requirements applicable to the flexible repayment options prior to the exercise of any flexible repayment options. karlsruhe Baden Bank may amend or vary such mortgage requirements from time to time. karlsruhe Baden Bank may amend or vary these terms and conditions from time to time.

E: Application for Flexible Repayment Option

karlsruhe Baden Bank reserves the right to refuse any application in respect of the exercise of any flexible repayment options for any reason which, in its absolute discretion, it thinks fit. Flexible Options can be set up on daily rest accounts. All applications must be received at least 16 days before the next repayment billing date to be processed.

F: Termination

karlsruhe Baden Bank reserves the right to terminate the exercise of any flexible repayment option at any time, with or without notice, for any reason which karlsruhe Baden Bank, in its absolute discretion, thinks fit subject to applicable law. In the event of the termination of the exercise of the flexible repayment options karlsruhe Baden Bank will require payment of the full monthly repayment which would otherwise be payable but for the exercise of any flexible repayment option and the monthly

Repayment will be recalculated to reflect the rate of interest, the balance outstanding at the time of termination of the exercise of the flexible repayment option and the remaining term of the loan.