Early Repayment Charge Calculator (Germany)
Estimate the German early repayment charge on a fixed-rate mortgage: present value method, saved costs, special repayment rights, 10-year termination right.
FAQ
How do I calculate an early repayment charge?
Using the asset–liability method: take the present value of all contractual payments until the end of the fixed-rate period, discounted at the yield on mortgage-backed covered bonds, subtract the outstanding balance and the risk and administration costs saved, then add the processing fee. The calculator simplifies this by using a single reinvestment rate.
When do I not have to pay an early repayment charge?
When you terminate at the end of the fixed-rate period, after ten years from full disbursement (§ 489 Abs. 1 Nr. 2 BGB), for a variable-rate loan, where the contract provides inadequate mandatory information (§ 502 Abs. 2 BGB), or where the bank suffers no interest loss.
Roughly how much is an early repayment charge?
As a rough guide: the difference between the contractual interest rate and the mortgage-backed covered bond yield × the average outstanding balance × the remaining term in years, less costs saved. For older low-interest loans, the charge is often zero. For loans with higher interest rates and a long remaining term, it can amount to several per cent of the outstanding balance.
Can I repay my mortgage early when selling?
Yes. Selling constitutes a legitimate interest (§ 490 Abs. 2 BGB). The bank may charge reasonable compensation for early repayment.
Does the cap of 1% of the outstanding balance also apply to mortgages?
No. The cap in § 502 Abs. 3 BGB applies only to general consumer loans, not to consumer mortgage loans.
Does an overpayment allowance reduce the charge?
Yes. The bank must account for agreed but unused overpayment rights as if you had exercised them (BGH, judgment of 19.01.2016, XI ZR 388/14).
Is an early repayment charge tax-deductible?
When selling a rental flat, it is generally not deductible as a rental expense; if the sale is taxable, it reduces the taxable gain on the sale. Seek tax advice on how it should be treated in your individual case.