Can I overpay my mortgage every month?

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For the question of whether there is a right of termination, the contractual agreements are primarily decisive. Take a look at the contract documents.

Regardless of this, you can orientate yourself on the following case groups:

1st case group

Loans with a fixed interest rate that is shorter than the loan term, i.e. the fixed interest rate ends before the loan is repaid in full:

You cannot cancel such a loan before the fixed interest period has expired. A termination is possible at the earliest at the end of the fixed interest rate with a notice period of one month (§ 489 Paragraph 1 No. 1, 1st half-sentence BGB). However, this does not apply if you have already made a new agreement on the interest rate with the bank.

2nd case group

Loans with an interest rate fixation of more than ten years:

You can terminate such a long-term loan regardless of the termination options described in the first case group according to Section 489 (1) No. 1 BGB after ten years after the full payment or new interest rate agreement with a notice period of six months (Section 489 Paragraph 1 No. 2 BGB). However, termination can only take place "after ten years". This means that ten years must have elapsed before the declaration of termination can be submitted, after which the notice period of at least six months must be observed.

This also applies to loans that are secured by land charges or mortgages.

3rd case group

Loans with an interest rate fixation of up to ten years that are secured by a land charge or mortgage, such as real estate loans:

As a rule, you cannot terminate such a loan prematurely.

Exception: You have a justified interest in other utilization of the item lent to secure the loan (e.g. in the event of a sale or any other charge), which requires an early termination of the loan agreement.

However, the bank is then entitled to a so-called early repayment penalty in accordance with Section 490 (2) BGB (see also: May my bank demand early repayment penalty?).

4th case group

Loans with variable interest, i.e. no fixed but variable interest rate has been agreed:

You can terminate such a loan at any time by giving three months' notice (Section 489 (2) BGB).

5th case group

Consumer loan contracts within the meaning of § 491 BGB that are not secured by a mortgage may be repaid in full or in part by the borrower at any time (§ 500 BGB). If no specific date is provided for the repayment of the loan, the bank may agree a notice period of up to one month with its customers. If a repayment date and a fixed interest rate have been agreed in the loan agreement, as is usual with installment loans, the lender may charge a prepayment penalty. This is calculated according to § 502 BGB and may not exceed the following amounts:

  • 1 percent of the prematurely repaid amount or 0.5 percent of the prematurely repaid amount if there is a period of no more than one year between the early and the agreed repayment,
  • the amount of debit interest that the borrower would have paid in the period between the early repayment and the agreed repayment.

Under certain conditions, the calculation of a prepayment penalty is excluded (see Section 502 (2) BGB).

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