Whether and how you can terminate your follow-up financing or your forward loan depends on which financing phase you are in and why you want to cancel. Basically, the following applies: contract is contract – the bank is only obliged to let you move before the agreed contract term expires: if you want to sell your house. But even then you will have to pay non-acceptance compensation or prepayment penalty.
On the other hand, if the mortgage interest rates have decreased in the period before you started your follow-up financing, this is not a sufficient reason for you to cancel your forward loan. In this case, you are obliged to take out the loan.
Pay the bank a prepayment penalty
You can only terminate your follow-up financing free of charge after the agreed fixed interest period has expired. According to legislation, this is possible after ten years at the latest. This means: If your fixed interest period is 15 or 20 years, you can change providers free of charge after ten years. But when does this period start? If you have extended the forward loan as part of a prolongation with the same provider as your current mortgage, the fixed interest period begins on the day the loan contract is signed. This emerges from a judgment of the district court. It looks different if the forward loan has been taken out with another provider – then this regulation does not apply and the fixed interest period only starts when the loan is drawn.
On the other hand, you can cancel the forward loan without incurring any costs up to 14 days after the contract is concluded – that is how long the cancellation period expires. It does not matter whether you have already taken out the loan or not: the date of your signature is decisive. However, if you find that the cancellation policy is incorrect or important deadlines and rights are not listed, you can cancel the forward loan at any time without incurring.
Not sure how to cancel your follow-up financing and want to know when you have the chance to switch to a new provider for cheaper interest? Our on-site consultants take the time to review your documents and assess the situation for you.