Construction costs are currently skyrocketing

And now just imagine you have a reason (divorce, job relocation, construction project becoming too expensive and therefore pulling the plug...) to have to sell after a short time. I would call that a hefty prepayment penalty for the bank: 3.92% on 30 years.....wow wow wow:eek:

The compensation is always calculated based on only 10 years. And the interest rate is not charged directly but rather the difference to covered bonds/bonds (active-passive method). The exact interest rate therefore only plays an indirect role. If you had contracted at 0.5%, it would also become expensive if, for example, federal bonds are trading deep in the negative.

Can it then conversely also happen that no prepayment penalty is incurred at all because yields have risen so much in the meantime? That has been the case in recent months and will probably continue like this for the time being ... Apart from processing fees and the like, of course ...

In the best case, you will probably just pay processing fees. The current covered bond rates partly exceed last year’s mortgage interest rate significantly.

The last 2-3 years were an extreme exception and inflation forces rising interest rates. Those who were foolish in the last 2-3 years not to lock in the lowest interest rates for 20-30 years will still be surprised by the loan amounts they took on.

Not at all. In Japan, this low interest rate phase has been totally normal for more than 20 years. Nothing is rising there. So why should one automatically assume that it can only last 2-3 years here?

Can it then conversely also happen that no prepayment penalty is incurred at all, because yields have risen so much in the meantime? That has been the case in recent months and will probably continue like that for now ...

Yes, of course. A prepayment penalty does not necessarily apply. It is only intended to compensate the bank for its loss. If the repaid money can be invested better than in your loan, the bank has no loss. There is a universally identical method for the calculation.

Note: This only applies when selling the property. If you just want to repay simply, the bank can a) refuse this or b) calculate a compensation at its reasonable discretion.

At my penultimate employer, we actually even paid out credit balances to customers. I don’t know how this is handled today.

Yes, of course. A compensation payment does not necessarily apply. It is only meant to offset the bank's loss. If the repaid money can be invested better than in your loan, the bank suffers no loss. There is a universally identical procedure for the calculation.

Note: This only applies when selling the property. If you just want to repay without selling, the bank can a) refuse this or b) charge compensation at reasonable discretion.

At my penultimate employer, we even paid out credits to customers. I don't know how this is handled today.

But in practice, this is probably manageable through goodwill, isn't it? I mean, if the bank gets its loss compensated... why put obstacles in the borrower's way?

But in practice it's probably handled by goodwill, isn't it? I mean, if the bank gets its damage compensated ... why make things difficult for the borrower?

Sure, usually no problem. But if the advisor had a bad weekend and simply dislikes you personally, he can also legally say no. However, such cases hardly ever occur.

But in practice it is probably negotiable out of goodwill, isn't it? I mean, if the bank gets its damage compensated ... why put obstacles in the way of the borrower?

There are plenty of banks that basically only allow it in the case of a sale or similar. The advisor can turn somersaults and it still won't be done. (Except in known cases)