No More Early Repayment Fees for Savings Bank Customers - Federal Court of Justice Ruling
Sparkasse Contracts Lack Sufficient Prepayment Clause
In a groundbreaking decision, the Federal Court of Justice (Bundesgerichtshof) has deemed that a common clause in mortgage loans from savings banks is insufficient. This ruling means that customers who've sold their financed properties will get their early repayment fees back.
If someone sells a property with a running interest rate tie financed by a savings bank, they often have to pay an early repayment fee to the bank. These charges are to compensate the financial institution for not being able to reinvest the prematurely repaid money as profitably as with the terminated mortgage financing. However, many banks fail to properly inform the customer about the calculation of the early repayment fee, leading the court to rule against them.
This decision is significant because it affects numerous agreements due to most German savings banks using the same mortgage financing templates. Customers who financed a property with a savings bank between 2016 and 2020 and paid an early repayment fee upon selling the property may be eligible for a refund. If the loan was settled after 2021, the refund claim may still be valid, as the claim cannot have expired in this case. In earlier cases, the individual circumstances must be evaluated. This decision reaffirms the Federal Court of Justice's position on the premature termination of mortgage loans.
Not only savings banks are in scope: previous high court decisions have gone against Commerzbank and banks from the cooperative association. Hence, anyone who took out a mortgage loan with a savings bank, Volks- and Raiffeisenbank, Sparda- or PSD-bank, as well as with Commerzbank and sold the financed property before the end of the interest rate tie may be entitled to a refund of their early repayment fee.
Consumers impacted by this ruling are advised to have an expert check if they qualify for a refund. For example, the Interessengemeinschaft Widerruf offers free and no-obligation assessments.
(First published on Wednesday, June 18, 2025.)
Source: ntv.de
Related Topics:
- Banks
- Mortgage lending
- Judgments
- Real estate
- Mortgage loans
- Savings banks
- Building loan
- Legal issues
- Cooperative banks
- Commerzbank
[1] Interest rates in Germany remain steady, with mortgage rates averaging around 3.3% in 2025.[2] With lending growth steady, consumers are increasingly repaying mortgage loans early to save on interest costs.[3] As per general legal precedent, early repayment charges in Germany are typically limited to twice the market interest rate or about 12% above the market rate per annum.[4] Loan agreements may offer special repayment options allowing partial or full early repayment without penalty.[5] The specific impact of the Federal Court of Justice ruling on early repayment charge policies across savings banks, Volks- and Raiffeisenbanks, Sparda- or PSD-banks, and Commerzbank is not explicitly detailed in the available sources. However, it is likely that the ruling strengthens existing limits on early repayment penalties and supports fairer conditions for borrowers.
- This groundbreaking ruling by the Federal Court of Justice may have significant implications for the employment policies of savings banks, as they are now required to provide clear and accurate information to customers regarding the calculation of early repayment fees.
- In light of the Federal Court of Justice's decision, a review of the finance department's policies regarding mortgage lending, personal-finance, and business practices might be necessary for banks to ensure compliance and maintain a positive reputation in the community.
