Glossary
Vorfälligkeitsentschädigung
Prepayment Penalty. The compensation a bank charges for repaying a fixed-rate loan early. It can run to five figures — but § 489 BGB grants a free exit 10 years after full disbursement, with 6 months' notice.
The penalty compensates the bank's lost interest margin and shrinks as rates rise (there may be none if market rates exceed your contract rate). Selling within the fixed period usually triggers it; porting the loan to a new property (Objekttausch) can avoid it.
Plan financing around the 10-year exit right: it aligns with the tax-free Spekulationsfrist, making year 10+ the natural window to sell or refinance penalty-free.