Many real estate owners give away cash because they do not use their statutory right of cancellation to hold on to expensive mortgage loans. Ten years after disbursement, a mortgage loan can be terminated by the borrower – even if the interest rate lock continues to run longer.
In 489 BGB it is stipulated that a cancellation period of ten years after full receipt of the loan requires a six-month notice period.
Banks may not require indemnity in this case. The law prohibits clauses in the credit agreement that prohibit or impede a cancellation after ten years – the option is therefore open to anyone whose credit is correspondingly long.
The interest rates on the financial markets are currently extremely favorable, because safe bonds are in demand among investors, thereby improving refinancing conditions for banks. It therefore makes sense to go looking for a favorable opportunity with foreseeable follow-on financing.
The difference between the current interest rate level and its historical average is currently so great that forward loans are also an option. With forward loans, borrowers are securing the terms for a loan to be paid out in the future. The lead time can be up to five years. For every month lead time, 2 to 4 basis points surcharge on the interest rate will be payable. Forward loans are also suitable for prospective owners whose plans are due in a few months or even years. The loans represent a commitment: The agreed loan amount must be retrieved. A resignation is possible only with most providers only after that and against compensation.
A large part of the real estate loans expiring in Germany is being extended at the house bank.
But that is rarely the right decision. House banks are apparently making favorable offers, which could be beaten by more than 80 percent of the cases by a competitor. Borrowers should be aware that a follow-up loan should not be more favorable than the first loan, not just because of the lower interest rates. The lending outflow has also fallen due to the repayment already made, so that the risk premium can be reduced.
Experts warn against panicking in the face of low interest rates and making hasty decisions. Banks and brokers like to point out the “perhaps never-recurring opportunity” offered by interest rates. But it is by no means certain that interest rates will rise significantly in the coming months and years.