Can I sell my house while the loan is still running?
“I can't sell, my fixed rate runs until 2031.” I hear that sentence in Dresden almost every week — from an older owner in Striesen, from a community of heirs in Löbtau, from a divorcing couple in Pieschen. In that form it is simply wrong. The question is never whether you may sell, but what early redemption costs. And that figure can be worked out in advance instead of feared.
May I sell my house while the loan is still running?
Yes, and you need no permission from the bank. The purchase price redeems the loan, the notary handles the mechanics, the buyer receives a property free of encumbrances. In law you even have two express rights of termination.
A land charge is security, not a ban on selling
It sits in section III of the land register and gives the bank a claim on the property if you stop paying. You may still sell — on completion the land charge is redeemed out of the purchase price and deleted.
Section 490 (2) BGB: a sale is a legitimate interest
With a loan secured by a land charge and carrying a fixed borrowing rate, you may terminate early where your legitimate interests require it. The statute names the case expressly: the need to realise the charged asset in another way. Notice is three months (Section 488 (3) sentence 2 BGB).
The notary does the processing, not you
The purchase contract provides for the bank to be paid directly out of the purchase price. The bank supplies the redemption figure and the deletion consent, the notary brings the two together. You sign; you do not make phone calls.
For the step-by-step process and what happens if the price falls short of the debt, see selling a house or flat with debt on it. What happens to the land charge after repayment is covered in deleting a land charge or leaving it in place.
What does the early repayment charge depend on?
On three quantities — and the most important is not the size of your loan, but the gap between your contractual rate and the rate at which the bank can reinvest the money today. If that gap is zero or negative, the charge is zero as well.
€0
Charge as soon as your borrowing rate is not above the reinvestment rate. On the arithmetic that is the case for loans taken out between 2020 and mid-2022.
72 months
Remaining fixed-rate period in the example below. Every month less takes one month of lost margin away from the bank.
6.6%
of the outstanding balance in the counter-example: 4.2% borrowing rate, 3.0% reinvestment, six years still fixed. A different contract, a different world.
The three levers and how they act
| Lever | Effect on the charge | Where to find the figure |
|---|---|---|
| Interest gap | The real lever. Only if your borrowing rate exceeds the reinvestment rate does a loss arise at all. Below it, the charge stays at zero. | Borrowing rate in the loan agreement; the bank states the reinvestment rate in its redemption letter. |
| Remaining fixed-rate period | Almost proportional. Six years still fixed costs roughly twice as much as three — discounting softens the effect only slightly. | The date the fixed-rate period ends, not the end of the overall term. |
| Outstanding balance | Strictly proportional. Half the balance produces half the charge at the same interest gap. | The bank's latest annual statement, as at your planned redemption date. |
Work through your own case
The calculator follows the asset-liability comparison method: it takes the interest margin your bank loses up to the end of the fixed-rate period and discounts it back to the redemption date. The result is deliberately an upper bound — more on that below the calculator.
Early Repayment Charge Calculator
Five figures from your loan agreement are enough for a first order of magnitude. You will find them on your bank's most recent annual statement.
How much does the figure hinge on the reinvestment rate?
Same balance, same remaining period — only the reinvestment assumption moves. Your entry is highlighted.
| Reinvestment rate | Interest margin per month | Charge (present value) | Share of balance |
|---|---|---|---|
| 2.0 % | 280 € | 18.982 € | 9.0 % |
| 3.0 % | 105 € | 6.911 € | 3.3 % |
| 4.0 % | 0 € | 0 € | 0.0 % |
The two provisions that matter
Section 489 (1) no. 2 BGB — free of charge after ten years
Ten years after the loan was received in full you may terminate in any case, giving six months' notice and owing no early repayment charge. If a new agreement on the borrowing rate or on repayment was made in the meantime, the ten-year period starts again on that day. If the fixed-rate period ends before repayment anyway, Section 489 (1) no. 1 BGB applies with one month's notice; for a variable rate, Section 489 (2) BGB allows termination at any time with three months' notice.
Section 490 (2) BGB — a sale is a legitimate interest
While the fixed-rate period is still running, you may terminate a loan secured by a land charge early where your legitimate interests require it. The statute expressly names the case where you need to realise the charged asset in another way — the sale of your house. The bank cannot then block the redemption, but it may claim the early repayment charge.
What this figure is — and what it is not An estimate, deliberately set on the high side: the calculation assumes a constant outstanding balance and leaves out the deductions the courts require of the bank — saved risk and administration costs, and any contractually agreed special repayment rights. Only your bank calculates the binding amount; ask for the redemption figure in writing. We are estate agents and provide neither legal nor tax advice.
When does redemption cost nothing at all?
In three situations set out in statute. All three sit in Section 489 BGB, and all three need nothing more than timely notice — no negotiation, no goodwill from the bank.
Ten years have passed
Under Section 489 (1) no. 2 BGB you may in any case terminate a loan with a fixed borrowing rate once ten years have elapsed since you received it in full — on six months' notice and free of charge. Important: if a new agreement on the borrowing rate or on repayment was made later, the ten-year period starts again on that day.
The fixed-rate period ends before repayment
If your fixed-rate period expires while the loan runs on and no new rate agreement has been made, Section 489 (1) no. 1 BGB applies: one month's notice, at the earliest for the day the fixed rate ends. Anyone planning a sale anyway puts the notary appointment in that window.
The rate is variable
With a variable-rate loan you may terminate at any time on three months' notice under Section 489 (2) BGB. No early repayment charge arises, because the bank loses no fixed interest expectation.
Four ways out of the loan
Redemption out of the purchase price is the normal route. It is not the only one, and in two situations it is not the cheapest.
| Route | How it works | Fits when … |
|---|---|---|
| Redemption out of the purchase price | The notary pays the redemption figure straight to the bank and the balance to you. The land charge is deleted and the buyer gets an unencumbered property. | … you are selling without buying again. The standard case. |
| Substituting the security | The loan continues unchanged; only the security moves to the new property. Nothing is repaid early, so no charge arises. | … you are buying again soon and your old rate is better than today's. The bank must agree, but is not obliged to. |
| Buyer takes over the debt | The buyer steps into your loan agreement. Under Section 415 BGB this depends on the bank's approval — it assesses the buyer's creditworthiness as it would for new lending. | … your rate is clearly below market and the buyer wants it. Rare in practice, because the terms seldom suit both sides. |
| Move the date | The sale is timed for the ten-year anniversary under Section 489 (1) no. 2 BGB or for the end of the fixed-rate period. Give notice in good time, or the advantage evaporates. | … the reason for selling can wait. With a community of heirs, a divorce or a move into care, it usually cannot. |
The order I recommend to owners
The redemption figure first, the price second
The most expensive mistake in my conversations is not the charge itself — it is the sequence. Owners fix a price, sign the agency agreement, run viewings, and only at the notary's office does a five-figure number appear that nobody had allowed for. By then the room to negotiate is gone.
Ask for the redemption figure in writing before the price is set — and for two dates: the earliest possible one, and one that falls after the end of the fixed-rate period or after the ten-year anniversary. The gap between those two numbers is the amount you are really negotiating with yourself over when you plan the launch.
And ask for the calculation to be broken down. Banks have to make the figure comprehensible; you do not have to accept a bare total.
How far does the charge fall if I sell later?
Considerably, and almost linearly. The example below holds the balance and the rates constant and moves only the redemption date — €210,000 outstanding, 4.2% borrowing rate, 3.0% assumed reinvestment.
| Redemption date | Remaining fixed-rate period | Estimated charge |
|---|---|---|
| in 3 months | 72 months | ≈ €13,800 |
| in 15 months | 60 months | ≈ €11,700 |
| in 27 months | 48 months | ≈ €9,500 |
| after the ten-year anniversary | notice under Section 489 (1) no. 2 BGB | €0 |
In reality the curve falls a little more steeply still, because you keep repaying in the meantime and the base shrinks. Against that stands the price: waiting costs market risk, and with a community of heirs or a divorce it costs nerves. What selling too late costs otherwise, I have written up under sale price and interest rates 2026.
What is left at the end?
The sum only makes sense once the redemption figure and the charge are known: purchase price minus outstanding balance, minus the charge, minus commission and costs. The first value in that chain is the sale price — and nobody estimates that seriously from a distance. I look at your property and weigh both sides for you, without you committing to anything first.
For a complete list of what else comes off the purchase price, see incidental costs of a property sale.
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