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Follow-up financing: extending a property loan

When the fixed-interest period of a property loan ends, there is usually still a residual debt outstanding. Then follow-up financing is needed. You can extend with the previous provider or switch to another. With a forward loan, interest rates can be secured in advance.

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Your chances of getting your money back

At the end of the fixed-interest period, you can renegotiate the conditions, switch the provider (rescheduling), or secure today's interest rates for the future with a forward loan. Rescheduling is often cheaper than the first offer from the house bank.
Ten years after the full receipt of the loan, you have a statutory special termination right with a six-month notice period (§ 489 BGB), even with a longer fixed-interest period, without an early repayment charge.

What you should do now

  1. 1

    1. Determine the residual debt

    Establish how high the residual debt is at the end of the fixed-interest period.

  2. 2

    2. Compare offers

    Obtain offers from the house bank and other providers.

  3. 3

    3. Check special termination

    Check whether the ten-year special termination right under § 489 BGB applies.

  4. 4

    4. Act in good time

    Take care of it early, if necessary with a forward loan, to address interest-change risks.

How to spot the scam

  • You accept the house bank's first offer without examination.
  • The special termination right after ten years is overlooked.
  • The follow-up financing is organized too late.

Frequently asked questions

What is follow-up financing?

The financing of the residual debt of a property loan after the end of the first fixed-interest period. You can extend with the previous provider (prolongation), switch to another (rescheduling), or secure the interest rates in advance with a forward loan.

Do I have a termination right after ten years?

Yes. Under § 489 BGB you can terminate a loan with a fixed borrowing rate ten years after the full receipt with a notice period of six months, even if the fixed-interest period runs longer, and without an early repayment charge. This opens up a favorable rescheduling.

What is a forward loan?

A loan that you conclude today at current interest rates but that is only paid out in the future, at the end of your fixed-interest period. This way you secure today's conditions in exchange for an interest surcharge, in case you expect rising interest rates.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.