Can I refinance my German mortgage without heavy penalties?

Short answer: You can refinance a German mortgage without heavy penalties if you wait until the fixed-rate period ends or invoke the 10-year break clause; early exits trigger a “Vorfälligkeitsentschädigung” prepayment fee.

Refinancing your German mortgage without heavy penalties centres on timing:

• End of fixed term. Most loans lock the rate for 5–15 years. From three months before that expiry date you can switch to a new bank at zero cost—no prepayment fee, just minor notary and registration charges.
• 10-year statutory right. German Civil Code §489 lets you cancel any fixed-rate mortgage after ten years have passed since full pay-out, with six months’ notice, regardless of the original term.
• Early refinancing. If you want out sooner, the lender is entitled to a Vorfälligkeitsentschädigung. We calculate this fee and compare it to possible interest savings; if the break-even is positive, we negotiate a waiver or partial reduction.
• Top-up instead of break. Need extra funds for renovation? Adding a second, smaller tranche avoids cancelling the first loan and keeps fees low.

At Finance for Expats we review your loan agreement, forecast the prepayment charge, and scan 700+ lenders for a better follow-up rate. Our interest guide shows how a 0.5 % drop can cut monthly payments by hundreds of euros. Once refinancing makes sense, we obtain the new offer, coordinate land-registry amendments and ensure the old bank releases the charge on time.

Key take-aways:

• Penalty-free switch at fixed-rate end or after 10 years with six months’ notice.
• Early exits incur a prepayment fee—calculate savings before acting.
• Finance for Expats handles fee analysis, new loan sourcing and seamless hand-over.