Repay loan early through special repayment before the fixed interest period ends?

Hello,

another point concerns me regarding the financing of our property:

What happens if I am able to make the agreed special repayments in full every year and thus have my loan fully paid off before the end of the fixed interest period?
Is something like that even possible?

So, assuming I take out a loan with a term of 15 years and have already repaid it after 10 years with the help of the special repayments.

As a result, the bank or the lender loses quite a bit of interest...

Best regards

Yes. If you increase the repayment, for example (e.g. 10%) and then also use the special repayment (e.g. annually 5%), then you will be finished even before the end of the fixed interest period (e.g. 10 years). But this probably happens rather rarely.... or you have won the lottery or inherited.

That can happen. Suppose: a loan of 100,000, interest 3.5%, initial repayment 2% with the right to increase up to 5%, special repayment annually 5%. After the first year with 2% repayment, this is increased to 5% and at the same time a special repayment of 5% = 5,000 euros is made annually at the beginning. Then the loan is paid off quite quickly. See amortization schedule.

...then the loan is paid back quite quickly.

Does that mean my obligations to the bank are then also fulfilled? Or is there in this case some kind of special fee, since the bank would be missing out on interest?!

Your obligation is to make the payments specified in the contract (interest and principal). No, no special fee. In the outlined case, only contractually compliant payments are made.

As long as you stay within the agreed repayment/special repayment, that is of course possible. You should not incur any special fees. The question is rather, if you plan high special repayments, wouldn’t it make more sense to fix the term at 10 years instead of 15 years and in return get a lower interest rate?!