Model for the repayment of loans with more or less than 10 years fixed interest. Mostly, the desire for a more favorable connection interest rate is in the foreground. We are happy to answer your questions about the special termination right in real estate financing according to §489 BGB. With a notice period of six months you can reschedule your debts at the current interest rate! Termination of the loan after 10 years:
Law firm -Real estate loan
When you think about a real estate loan, you usually think about the annuity loan first. The pension is a constant, regular payment (“credit installment”), which results from interest and repayment. Each installment reduces the remaining debt and thus the interest due in the following month. In the case of annuity loans, the borrowers agree on a contract period (fixed interest rate).
The remaining debt, if it can not be paid, must be reimbursed by a new order. A special repayment option can also be specified in the loan agreement. It grants the borrower the right to make special payments that reduce the remaining debt.
As a rule, credit institutions grant a special repayment right of up to 5% pa in relation to the original loan amount. An annuity loan is the so-called full repayment loan. The repayment amount is calculated in such a way that no remaining liability remains after the end of the term. The benefits of this option are obvious: since there is no residual debt after the fixed interest rate, you will not need follow-up financing with an unknown interest rate later on.
But you have to be able to afford such an alternative. It may be necessary to refinance the remaining debt at the end of the fixed interest period at an interest that is not disclosed today. This means that the borrower has an increased or lower interest rate risk, depending on the chosen maturity range and residual debt. Our partner banks offer annuity loans with fixed interest rates of up to 30 years.
Loans with a contract duration of more than 10 years
Loans with a contract duration of more than 10 years can be terminated by the borrower through a legally defined special termination right. 10 years after full payment of the loan with a notice period of 6 months. If the borrower fulfills his contractual obligations, the principal bank has no right to termination within the contractually agreed period. If you sell the property, you may also terminate the loan agreement for a period of less than 10 years.
In this case, however, the financing bank is entitled to compensation for the early termination of the contract by the borrower.