Glossary
Sollzinsbindung
Sollzinsbindung: Sollzinsbindung (German for 'fixed-interest commitment', i.e. the fixed-interest or rate lock-in period) is the contractually agreed span during which the interest rate on a German property loan cannot change. Typical terms are 10, 15 or 20 years.
What is Sollzinsbindung (fixed-interest period)?
Sollzinsbindung is the German term for the fixed-interest period, the span for which the interest rate on a property loan is contractually fixed. During this term the monthly payment stays constant, whatever happens to the general level of interest rates in the market. That gives borrowers planning certainty and lets them budget reliably for years.
Typical fixed-interest periods in German mortgage finance are 10, 15 and 20 years. Shorter terms (5 years) or very long ones (25 to 30 years) are also possible but less common. Longer terms usually carry a small rate premium: in spring 2026, terms ran at about 3.3% for 10 years, 3.6% for 15 years and 3.8% for 20 years (nominal debit interest rate, 60% loan-to-value).
At the end of the fixed period, with a normal repayment rate (1 to 2% initial repayment), the loan is not yet fully paid off. The remaining balance (Restschuld) is then carried on through follow-up financing (Anschlussfinanzierung), either with the existing lender (Prolongation) or by switching to another bank (Umschuldung).
Choosing a fixed-interest period: example
Loan: €300,000, debit rate depending on the term, 2% initial repayment
| Fixed period | Debit rate | Monthly payment | Remaining balance at end of term |
|---|---|---|---|
| 10 years | 3.30% | €1,325 | approx. €231,000 |
| 15 years | 3.65% | €1,413 | approx. €196,000 |
| 20 years | 3.80% | €1,450 | approx. €155,000 |
Over 15 years the monthly payment is only about €88 higher than over 10 years. In return the remaining balance drops by roughly €35,000, and the interest-rate risk is removed for five more years. If you refinanced (Umschuldung) after 10 years at an assumed higher rate of 5%, the monthly payment on the remaining debt would rise noticeably.
Good to know
- Plan the remaining balance early: The higher the initial repayment, the smaller the remaining balance at the end of the fixed period and the less interest-rate risk on the follow-up financing. Raising the repayment rate from 2% to 3% cuts the remaining balance after 15 years considerably.
- Use special repayments (Sondertilgungen): Many loan contracts allow annual special repayments (usually 5 to 10% of the loan amount) with no early-repayment charge. That lowers the remaining balance and shortens the term.
- Forward loans for the follow-up financing: If your fixed period ends in two to five years, you can lock in today's terms now through a forward loan (Forward-Darlehen).
- Special right of termination under Section 489 BGB: Regardless of the agreed fixed-interest period, borrowers can cancel their loan ten years after full disbursement, with six months' notice and no penalty. This statutory right applies even with an agreed fixed period of 20 or 25 years.
Legal basis
The right to ordinary termination of property loans is set out in Section 489 BGB (Bürgerliches Gesetzbuch, the German Civil Code). Subsection 1 No. 2 grants the borrower the right to terminate after ten years from full disbursement, with six months' notice. The bank may not demand an early-repayment charge (Vorfälligkeitsentschädigung) in that case. The obligation to state the debit interest rate (Sollzins) and the fixed-interest period in the loan contract follows from Article 247 Section 7 EGBGB together with the Mortgage Credit Directive (EU Directive 2014/17/EU).
Frequently asked questions
Sollzinsbindung translates as the fixed-interest period, sometimes called the rate lock-in period. It is the length of time your debit interest rate (Sollzins) is fixed and cannot change. Common terms in Germany are 5, 10, 15 or 20 years, with 10 years being especially popular.
At the current interest level of roughly 3.5 to 4%, financing experts recommend a fixed period of at least 15 years. That locks in favourable terms for the long run and protects borrowers against a possible rate rise when the follow-up financing (Anschlussfinanzierung) falls due.
At the end of the fixed period the loan is usually not yet fully repaid. The remaining balance (Restschuld) has to be carried on through follow-up financing, either a Prolongation or an Umschuldung, at the rates that apply then. Planning for the remaining balance early leaves you well prepared.
Yes. Under Section 489 BGB borrowers may cancel a property loan ten years after full disbursement, with six months' notice and no penalty. No early-repayment charge (Vorfälligkeitsentschädigung) applies in that case.