Mortgage Refinancing Calculator (Germany)

Follow-up financing (Anschlussfinanzierung) is the financing for your remaining balance once the first fixed-rate period ends. Very few properties are fully paid off within the first ten or fifteen years. Whatever is still open at the end of the period gets refinanced at a then-current rate.

The key distinction is between the fixed-rate period and the total term. The fixed period only sets how long your rate is guaranteed. The total term until you are debt-free is usually much longer. That is exactly why a balance almost always remains at the end of the period and has to be refinanced.

There are three routes: prolongation with your existing bank, refinancing with a new bank, and a forward loan that locks today's rate for the future. Expiring subsidy loans also need follow-up financing. In German, what English speakers call refinancing usually means the Umschuldung, that is, switching to a new bank.

The balance is the most important starting figure. It determines how much you refinance and how high your future rate will be. If you already know it, enter it directly. It appears on your latest statement or in your bank's amortisation schedule.

If you do not know it, the calculator works it out from the original loan amount, the old interest rate, the old initial repayment rate and the length of the first fixed period. Behind this sits the annuity formula: month after month the balance falls because part of the payment goes towards principal. An annual special repayment lowers the balance further.

The full amortisation schedule with every interim figure is in the repayment calculator. There you can also see how a higher repayment rate or special repayments affect the balance at the end of the period.

Which route pays off depends on the rate advantage and the effort. Prolongation is convenient and free, refinancing is often cheaper, and the forward protects you against rising rates. The sections below explain each route in detail.

One special case is subsidy loans with an expiring fixed period. They also need follow-up financing. A renewed subsidy is usually not possible; the balance then simply continues as a normal loan and is refinanced like any other balance.

With a prolongation you extend the contract with your existing lender at a new rate. There is no change of bank, no notary and no land registry costs. The effort is minimal; often a signature is enough.

The drawback: the conditions are often a little worse because there is no competition. The bank usually sends its offer about three months before the period ends. Always compare it before you sign.

With refinancing, a new bank pays off your balance and takes over the mortgage charge. Instead of deleting and re-entering the charge, it is transferred (Grundschuldabtretung). As a guide value that costs only about 0.2 to 0.3 percent of the balance in notary and land registry fees.

A rule of thumb: a rate advantage of roughly 0.1 percentage points already outweighs the transfer cost. The effort is higher than with a prolongation because you submit documents and go through a new credit check. Even so, refinancing is often the cheapest route. You can work out the exact mortgage-charge fees with the notary fees calculator.

With a forward loan you reserve today's rate for a future follow-up financing, often up to 60 months in advance. Banks charge a premium for this. Currently that is typically 0 to about 0.017 percentage points per month of lead time. Many banks waive the premium for roughly the first 12 months and only add it per month after that.

An example with a premium-free run-up: with 24 months of lead time, 12 of them premium-free, 12 relevant months remain. Times 0.015 that gives 0.18 percentage points added to the rate. The shorter the effective lead time, the smaller the premium.

Be clear about one thing: a forward is a bet on rising rates, not a guaranteed advantage. It only pays off if the market rate at the end of the period is above the locked rate including the premium.

The rate follows the annuity formula: the annual rate equals the balance times the sum of interest rate and repayment rate divided by 100, and the monthly rate is a twelfth of that. With follow-up financing you should usually pick a higher initial repayment rate than on the original purchase. The remaining term is shorter and the goal is to become debt-free.

Alternatively you set a fixed target payment, and the repayment follows from it. The figures to steer by are the balance at the end of the new period and the total interest cost. Whether the new rate is affordable in the long run is something you check with the home affordability calculator.

A word on the fair comparison: the calculator holds the monthly rate constant across all three routes and only varies the interest rate. At the same rate, the better interest rate clearly leads to less interest cost and a lower balance. That keeps the cost comparison clean and undistorted by different payments.

With a fixed period longer than ten years you can terminate under § 489 Abs. 1 Nr. 2 BGB (German Civil Code). The termination takes effect at the earliest ten years after full disbursement and is declared with six months' notice. So you can terminate from around year 9.5, even if the fixed period formally runs longer.

The best part: using this right triggers no early repayment penalty. Anyone who had a 15-year period fully disbursed in 2016 can switch from 2026 without any penalty. You determine the reference date precisely: the period starts on the day after full disbursement. With staggered payouts, for example on a new build, the day of the last tranche counts.

If you exit before the ten years are up, however, the bank usually charges an early repayment penalty (Vorfälligkeitsentschädigung). You can estimate how high it might be with the early repayment penalty calculator.

A rough guide by remaining time to the end of the period: under 12 months, gather offers for prolongation and refinancing. Between 12 and 60 months, also consider a forward loan. Your view on rates matters too. If you expect rising rates, that argues for a forward. With stable or falling rates, waiting tends to pay off.

The break-even logic is simple: a forward is cheaper than refinancing later as soon as the future market rate is above the locked forward rate. Your credit standing and the loan-to-value also play a role. Thanks to repayment, your loan-to-value has fallen, which usually improves the conditions.

For investors one point is central: for a rented property, the interest of the follow-up financing is deductible as income-related expenses. That changes the after-tax picture considerably. The calculator shows the interest cost before tax. For the after-tax view, use the rental yield calculator and the cash flow calculator.

Prolongation is usually free. With refinancing and a forward involving a change of bank, notary and land registry fees under the GNotKG apply for the mortgage transfer, as a guide value about 0.2 to 0.3 percent of the balance. If the old charge has to be deleted and a new one entered, expect closer to 0.5 percent.

The forward premium is not a one-off fee but a calculable interest add-on over the term. For the detailed calculation of the mortgage-charge and transfer costs, use the notary fees calculator. The full closing costs when buying a property are shown by the closing costs calculator.

You enter your balance or have it calculated, choose the new interest rate and repayment rate, and set the new fixed period. Optionally you enable the forward loan and set the lead time including the premium-free run-up months. When you pick the fixed period, the interest rate is pre-filled as guidance until you adjust it yourself.

The calculator gives you the new rate, the balance at the end of the new period and the interest cost. It puts prolongation, refinancing and forward side by side at the same rate and highlights the cheapest immediate option. Everything is calculated entirely in your browser, with no data transfer, for free, and with a PDF export.

The most common mistake is leaving it too late and accepting the first bank offer unchecked. Anyone who compares early almost always has the upper hand. A second mistake is too low a repayment rate. It needlessly extends the remaining term and costs more interest in the end.

With a forward, the premium is often underestimated when the lead time is long. Make the most of the premium-free run-up and do the maths carefully. Equally risky: overlooking the special termination right under § 489 BGB and needlessly paying an early repayment penalty when a free exit would have been possible. You can check the possible amount in advance with the early repayment penalty calculator.

Also, never compare only the interest rate; always compare total cost including fees. And for rented properties, the tax deductibility of the interest belongs in the calculation, otherwise you underestimate the true advantage of the cheapest route.