If you repay a property loan before the fixed-interest period ends — for instance because of a sale — you generally have to compensate the bank for its lost interest income: the prepayment penalty (Vorfälligkeitsentschädigung). Depending on the rate difference and remaining term, it can amount to several percent of the remaining debt. Our calculator estimates the order of magnitude using the simplified asset-liability method, so you can realistically plan the cost of an early exit.
How to use this calculator
You need four values from your loan contract and the current market environment:
- Step 1: Enter your loan's current remaining debt.
- Step 2: Enter your loan's contract interest rate.
- Step 3: Enter the remaining fixed-interest period in years.
- Step 4: Enter the reinvestment rate — the rate at which the bank could currently reinvest the repaid money in mortgage bonds (Pfandbriefe). It follows the current market rate level.
Understanding the results
The penalty compensates the bank for the difference between contract rate and reinvestment rate:
- Interest rate difference: contract rate minus reinvestment rate. If the reinvestment rate is above the contract rate, there is no loss — the penalty is zero.
- Annual interest loss: the rate difference applied to the remaining debt.
- Estimated prepayment penalty: the interest loss summed and discounted over the remaining term.
- Share of remaining debt: the penalty as a percentage of the remaining debt — handy for comparing scenarios.
Why the actual penalty may differ
Our calculator deliberately estimates conservatively: it applies the rate difference to the full remaining debt over the entire remaining term. In their exact calculation, banks must account for the contractually agreed amortization and any granted extra repayment rights as loss-reducing — so the actual claim is usually lower than our estimate. In addition, saved administration and risk costs must be deducted, while a processing fee may be added. Important for sellers: in certain cases no penalty is due at all — for example when terminating under §489 BGB ten years after full disbursement, in case of faulty withdrawal instructions, or when the bank's calculation is flawed. When in doubt, have the bank's statement reviewed by a consumer advice center or a specialized lawyer.
Tips
- •Ten years after full disbursement you can terminate the loan under §489 BGB with six months' notice free of charge — with no prepayment penalty at all.
- •When selling, a collateral swap (Pfandtausch) can often avoid the penalty: the loan continues and is transferred to a new property.
- •Use all granted extra repayment rights before paying off — they lower the remaining debt and thus the basis for the penalty.