A mortgage is a 30-year contract with decisions made on day one. How fixed period, repayment rate and extra repayments interact and which remaining debt you can afford after ten years.
In short
- Fixed periods 2026: 10 years around 3.4 percent, 15 years around 3.6, 20 years around 3.8. Fix long if the payment fits.
- Repayment at least 2 percent, better 3: at 2 percent paying off takes over 30 years.
- Agree free extra repayments of 5 percent a year and a change of repayment rate.
- Run the remaining debt after the fixed period at 5 percent; whoever fails then bought too much.
The annuity
An annuity loan has a fixed payment of interest and repayment. Because interest is calculated on the remaining debt, the interest share falls every month and the repayment share rises. At €300,000, 3.5 percent interest and 2 percent repayment the payment is €1,375. After ten years around €72,000 are repaid and the remaining debt is €228,000. At 3 percent repayment the payment is €1,625 and the remaining debt after ten years €193,000.
The fixed period
The fixed period (Zinsbindung) is the time the rate is guaranteed. Ten years are standard, 15 and 20 cost 0.2 to 0.5 points more. At a 3.5 percent rate level a long fix is insurance against rates of 5 or 6 percent in 2036. Because you may cancel after ten years anyway, a 15 or 20-year fix gives security without a downside: if rates fall you cancel free after ten years, if they rise you stay in the old contract.
Repayment
A repayment rate of one percent at 3.5 percent interest means paying off over roughly 45 years, two percent over 32, three percent over 24, four percent over 19. Whoever buys at 40 should be debt-free at retirement, so repay at least three percent. A change of repayment rate, free twice during the fixed period, gives room with children or salary jumps. Extra repayments of five percent of the loan a year are free at most banks and the best place for bonuses and inheritances.
The remaining debt
After the fixed period the remaining debt is refinanced at the then current rate. Run it at five percent: €228,000 at five percent and three percent repayment gives a payment of €1,520 instead of €1,375. If that fits the budget, the financing is stable. If not, the price was too high or the repayment too low.
Building blocks
KfW loans for efficient new builds or renovations with a rate advantage, building society contracts as rate insurance for the follow-up financing, support for families with children on low incomes. A full repayment loan with the rate fixed to the last instalment exists with a discount and without remaining debt risk, but without flexibility. Two loans with different fixed periods spread the rate risk.
Loan-to-value
Banks tier the rate by the loan’s share of the lending value, which usually sits ten percent below the price. Up to 60 percent gets the best rate, up to 80 slightly more, above 90 markedly more. Equity lowers not only the amount but the price of every borrowed euro. And: compare at least three offers; the differences in 2026 run 0.3 to 0.6 points, which at €300,000 over ten years is €10,000 to €18,000.
Try it yourself
Mortgage CalculatorPrice, federal state, equity, rate and repayment: monthly payment, closing costs and remaining debt after the fixed-rate period.Loan CalculatorLoan amount, rate, term: monthly instalment, total interest and repayment schedule, also for refinancing.Frequently asked questions
How much equity do I need?
Closing costs plus 10 to 20 percent of the price. Without equity only a few banks lend, at markedly higher rates.
Should I avoid commitment interest?
It accrues when the loan is not drawn, usually after 6 to 12 months at 0.25 percent a month. For new builds agree a long commitment-free period.
Is a building society contract sensible?
As rate insurance for the follow-up financing in ten years, yes, if the closing fee of one percent of the contract sum is justified by the secured rate. As a savings product, no.
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