Mortgage renewal in Germany: prolongation, remortgaging and forward loans explained
When your fixed-rate period ends in Germany, you have three options: prolongation (renewing with your current bank), remortgaging (switching to a cheaper lender), or a forward loan (locking in today's rate for up to 5 years ahead). This guide explains costs, timing and what to watch out for.
Ahmet Parlak
Mortgage & Property Finance Expert, Vienna
TL;DR: Key facts about mortgage renewal in Germany
- The fixed-rate end date is the key event — not the loan term itself.
- 3 options: prolongation (easy, often more expensive), remortgaging (cheaper, with switching costs), or forward loan (rate lock in advance).
- Remortgaging costs: land register change approx. 0.3–0.5% of remaining balance — breaks even in 1–2 years at a 0.3% rate advantage.
- Forward loan: up to 5 years ahead, surcharge approx. 0.01–0.03% per month of lead time.
- Timing: start comparing 12–18 months before expiry, decide 3–6 months before.
- Biggest mistake: doing nothing and accepting automatic renewal — often costs thousands over the remaining term.
Last updated: 2026-03-16 • This overview does not replace individual advice from an independent financial adviser or your bank.
Short answer: What is Anschlussfinanzierung?
Anschlussfinanzierung is the German term for mortgage renewal — what happens when your fixed-rate period ends. You have 3 options: prolongation (renewing with your current lender), remortgaging (switching to another bank), or a forward loan (securing today's rate for a future date, up to 5 years ahead). Comparing offers is worthwhile: banks typically offer existing customers worse rates than new ones.
TL;DR: Key facts about mortgage renewal in Germany
- •The fixed-rate end date is the key event — not the loan term itself.
- •3 options: prolongation (easy, often more expensive), remortgaging (cheaper, with switching costs), or forward loan (rate lock in advance).
- •Remortgaging costs: land register change approx. 0.3–0.5% of remaining balance — breaks even in 1–2 years at a 0.3% rate advantage.
- •Forward loan: up to 5 years ahead, surcharge approx. 0.01–0.03% per month of lead time.
- •Timing: start comparing 12–18 months before expiry, decide 3–6 months before.
- •Biggest mistake: doing nothing and accepting automatic renewal — often costs thousands over the remaining term.
Note: Interest rates and conditions change constantly. Always request current comparison offers and review terms carefully before signing.
The 3 options when your fixed-rate period ends
When your fixed-rate period ends, the loan does not automatically continue at the same terms. You must actively choose one of three paths:
- •Prolongation: renewing with your current lender. Advantage: no hassle, no land register change. Disadvantage: your bank typically offers existing customers worse rates than it gives new customers.
- •Remortgaging (Umschuldung): switching to a new bank. Advantage: competitive rates — often 0.2–0.5% cheaper than prolongation. Disadvantage: land register change required (approx. 0.3–0.5% of remaining balance for notary + land registry).
- •Forward loan (Forward-Darlehen): lock in today's rate for a future renewal date — up to 5 years in advance. Surcharge: approx. 0.01–0.03% per month of lead time. Useful when rising rates are expected.
Prolongation: what your bank will offer you
Prolongation is the path of least resistance — and your bank knows it. The renewal offer typically arrives 3–6 months before expiry by letter or online banking. The process is simple: you sign, the rate lock continues.
The catch: banks exploit the inertia of existing customers. Studies and consumer reports consistently show that prolongation offers are 0.2–0.4% above what the same bank charges new customers for a comparable loan.
No land register fees apply — a genuine cost advantage over remortgaging. The rule of thumb: always collect comparison offers from at least 3–5 other lenders, then use the best offer as leverage in negotiations with your current bank.
Remortgaging: switching to a cheaper lender
When remortgaging, a new bank takes over your remaining balance at (usually better) terms. In practice, both banks coordinate the handover and the administrative burden on you is manageable.
The main cost is the land register change: the new lender must be registered as the mortgage holder. This costs approximately 0.3–0.5% of the remaining balance (notary + land registry fees).
- •Example: €200,000 remaining balance → remortgaging costs approx. €600–1,000.
- •Rate saving of 0.3% on €200,000: approx. €600/year → break-even in approx. 1–2 years.
- •Timing: give written notice to your current lender at least 3 months before the fixed-rate end date.
- •Legal basis: § 489 BGB — after 10 years of a fixed-rate period, any borrower can cancel with 6 months' notice, regardless of contract terms.
- •No early repayment charge applies when cancelling under § 489 BGB or at the natural end of the fixed-rate period.
Forward loan: hedging interest rate risk
A forward loan is a bank commitment to lend you money at a fixed rate — but only from a future date. This lets you reserve today's rate for your mortgage renewal, even if your current fixed period still has years to run.
This is particularly useful when you expect rates to rise. The price of this certainty is a rate surcharge that increases with the length of the forward period.
- •Rate lock available up to 5 years before the renewal date.
- •Surcharge per month of lead time: approx. 0.01–0.03% (varies by lender).
- •Example: 24 months lead time → approx. 0.24–0.72% added to the nominal rate.
- •Makes sense when: rising rates are expected and long-term planning security is important.
- •Risk: if rates fall, you cannot exit without cost. A forward loan is binding.
- •Compare lenders: surcharge rates vary significantly between banks.
Optimal timing for mortgage renewal
The most common mistake with Anschlussfinanzierung is waiting too long. Borrowers who act only weeks before expiry face time pressure — and often end up accepting whatever prolongation their bank offers.
- •12–18 months before expiry: monitor the market, request quotes from several banks, consider a forward loan.
- •3–6 months before expiry: make your decision, submit documents, present competing offers to your current bank and negotiate.
- •Forward loan: ideal with 18–36 months of lead time when rising rates are expected.
- •Final month: poor timing for decisions — time pressure weakens your negotiating position.
- •Automatic renewal: what happens if you do nothing. Almost always at suboptimal rates — avoid it.
Calculating your remaining balance at the end of the fixed-rate period
The remaining balance at the fixed-rate end date is the starting point for your renewal. It determines the new loan amount, remortgaging costs and the new monthly repayment.
The simplest method: your annual bank statement shows the current remaining balance. Many banks also provide an online repayment schedule that projects the balance at any future date.
- •Remaining balance = original loan amount − cumulative repayments (simplified).
- •Precise calculation also accounts for interest charges, repayment timing and overpayments.
- •Online calculators: many banks and comparison portals offer free remaining balance tools.
- •Key inputs for renewal planning: remaining balance, total remaining term, target new rate, target new repayment level.
- •Recommendation: choose a higher repayment rate than on the original loan — this shortens the total term and reduces overall interest costs.
FAQ: Mortgage renewal in Germany
12–18 months before your fixed-rate period ends. This gives you time to compare offers, negotiate and potentially take out a forward loan. Starting too late often means accepting the bank's renewal offer at unfavourable rates.
Remortgaging costs: land register change approx. 0.3–0.5% of the remaining balance + notary. For a €200,000 remaining balance: approx. €600–1,000. Break-even at a 0.3% rate difference: approx. 1–2 years.
A forward loan locks in today's interest rate for a future mortgage renewal — up to 5 years in advance. Cost: approx. 0.01–0.03% rate surcharge per month of lead time.
No — you can always switch to another lender. The land register change costs (approx. €600–1,000) typically break even within 1–2 years thanks to the rate difference.
Your bank will renew automatically — usually at terms that are not the best available on the market. Many borrowers unknowingly pay thousands of euros more than necessary over the remaining term.
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