If you have a property loan with a long fixed interest period, you may wonder whether and when you can leave early without paying a prepayment penalty. Two rules help you sort this out.
The right to terminate after ten years
If your loan has a fixed interest rate, you may terminate it after ten years with six months’ notice (1). The ten years start when you have received the full loan amount. A contract cannot exclude this right (1). If the fixed rate period ends before the agreed repayment date and nothing new was agreed, the notice period is one month (1).
An example from the Verbraucherzentrale: with a 15-year fixed rate and full payout on 15 August 2022, you can terminate with six months’ notice from 15 August 2032 without a penalty (2). Important: a termination is treated as not having happened if you do not repay the amount within two weeks after it takes effect (1). So it pays to sort out your follow-on financing in good time.
Extra repayments (Sondertilgung)
Many banks let you repay an extra 5% of the original loan amount once a year, sometimes up to 10% (2). You benefit even if you never use this right: the bank must include possible extra repayments when calculating a prepayment penalty, which lowers it (2).
If the ten years are not yet over
If you want to leave early, for example because you are selling the property, expect a prepayment penalty (Vorfälligkeitsentschädigung). The Verbraucherzentrale advises having the calculation checked independently. For contracts from 21 March 2016, the claim can fall away if mandatory information is missing or inadequate in the contract (2).
Warning! Borrowing money costs money.
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This article is general information. We do not give advice and do not recommend any particular provider or loan; the decision is yours.
Sources (checked on 26 October 2026)
- Section 489 BGB, ordinary right of termination of the borrower (German law) – gesetze-im-internet.de
- Verbraucherzentrale: Baufinanzierung vorzeitig ablösen (as of 19 Nov 2025) – verbraucherzentrale.de