When your fixed rate ends

📌What actually happens at the end of the fixed period

Your fixed rate covered a period — commonly ten or fifteen years — not the whole loan. At the end of it there is still a balance outstanding, often more than half the original amount, and it needs a new interest rate.

Three routes exist. Prolongation means accepting your existing bank's offer. Umschuldung means moving the remaining loan to a different lender. Repayment, if you happen to have the money, ends it.

The default path is the expensive one. Banks typically send an offer around three months before the expiry, and an offer that arrives with no competition rarely represents the best rate available.

📌The ten-year right nobody uses

Under section 489 of the civil code, once ten years have passed since the loan was fully disbursed you may terminate it with six months' notice — regardless of the fixed period you agreed, and without paying an early repayment penalty.

This matters most to anyone who fixed for fifteen or twenty years when rates were higher. After year ten you are free to leave, and the bank cannot charge you for it. Many borrowers pay above-market rates for years without knowing the right exists.

🏦Forward loans: locking a rate in advance

A forward loan lets you agree today the rate for a fixed period that begins in the future — commonly up to around five years ahead, though the maximum varies by lender.

The price is a surcharge for each month of lead time. That makes it insurance rather than a bet: you pay a premium to remove the risk that rates are higher when your period ends. Whether it is worth it depends on the surcharge and on how much a rate rise would hurt you.

The honest framing is that nobody can tell you where rates will be in three years. The question is not whether rates will rise but how much certainty is worth to your household budget.

🏦Switching lender: what it involves

Less than people expect. The new bank takes over the existing charge on the property rather than registering a fresh one, through an assignment (Abtretung). That keeps the cost low — typically a few hundred euros in notary and land registry fees, which the new lender sometimes covers.

No new notary appointment for the property, no new valuation in many cases, and no transfer tax. Against that, a rate improvement of even a quarter of a percentage point on a €250,000 balance is worth roughly €625 a year.

💶The timeline that saves money

The single most valuable habit is starting before the bank writes to you. An offer you receive when you have nothing to compare it against is a very different conversation from one you receive with two competing quotes in hand.

⏱️Things worth revisiting at the same time

The end of a fixed period is a natural moment to change the structure rather than only the rate. Raising the repayment rate shortens the remaining term substantially. A lump sum from savings reduces the balance before the new rate applies to it. And where your income has grown since you bought, a higher payment now can take years off the loan.

It is also the point at which a KfW renovation loan can be folded into the picture if the property needs energy work — a conversation worth having before you sign the follow-on rather than after.

📌What it is actually worth

Follow-on financing is the least glamorous decision in a German mortgage and often the most valuable per hour spent. There is no property to find, no notary, no purchase costs — only a rate comparison on a balance that is already there.

Against a few hundred euros of transfer costs, and often none at all where the new lender absorbs them, that is a return on an afternoon's work that few other financial decisions match.

⚠️Common mistakes at the end of a fixed period