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The Fixed Interest Period refers to how long your mortgage's interest rate is fixed. In Germany, the most frequently used fixed interest period for a mortgage is 10 years. This means that the interest rate does not change for 10 years.  

In general, a longer fixed period will mean greater security and a higher interest rate. A shorter fixed period will mean a lower interest rate but a higher interest rate risk. However, this is not always the case. A complicating factor is that if you leave before the 10 years are over, you may be subject to paying the bank the lost interest payments as a penalty, the so-called “Vorfälligkeitsentschädigung”. 

While intermittent maturities are available, in Germany, banks offer the best prices for rates that are fixed for 5, 10, 15, 20, and 30 years.

TIP: Rates for 10-year mortgages are relatively attractive in Germany because banks make substantive fixed costs and want to recoup them during the loan period. Therefore, shorter fixed interest tends to be relatively expensive compared to other countries. Longer rates (over 10 years) rates tend to be more expensive than in other countries, as customers have the right to cancel their mortgage after 10 years. Banks recoup the potential costs for this by charging more for longer mortgages.

Use the “right mortgage” tool to see what the best fixed rate period is for you. We take all factors into account, like the interest rate, interest rate projections, risk of early departure and penalty, etc.