If your financial situation changes, a modified amortization allows you to reduce the monthly installment of the Credits to the new situation. The right to change the repayment during the term of the loan must be agreed in the loan agreement. It is common to change the repayment rate between a minimum and maximum repayment rate. Some banks allow to change the repayment rate free of charge. Usually, however, there are restrictions on how often you can change the repayment rate during the term of the loan. Common phrases that allow you to adjust the repayment rate are Once a year (e.g. savings bank) or twice during the fixed interest period (e.g. ING) allow free of charge. Other providers charge an additional fee for changing the repayment during the term. With a framework loan and the Securities Loan on the other hand, the adjustment of the repayment is usually free of charge without limitation.
Repayment change during the term of a loan
Situation at the savings bank
A free adjustment of the repayment Once a year is common practice at many savings banks. The repayment rate change is possible in the corridor of 2 % up to 5 % per year for many contracts of the savings banks. In addition, individual agreements can be made to change the repayment rate at many savings banks. For example, you can contractually exclude changing the repayment and ask for a lower interest rate in return.
The change of redemption is made at the Savings Bank via a letter with signature.
Situation at the Volksbank
Changing the repayment during the term is possible at many credit unions. 3 times free of charge within the term. At the Volksbanks in Bavaria, the change in the repayment rate is called Munich freedom. The repayment rate change is possible at many Volksbanks in the corridor of 2 % up to 5 % per year. The repayment rate change has the name Münchener Freiheit at some Bavarian Volksbanks. It is an integrated component of real estate financing at the Volksbank. However, an individual cancellation of the repayment rate is possible. For this, you should request a reduction of the interest rate.
Further building blocks of the construction financing of Volksbank are the Münchener Durchläufer, the Münchener Reserve and the Münchener Forward.
The change of redemption is made at the credit union via a letter with signature.
Situation at ING
The repayment can be adjusted free of charge at ING during the fixed-interest period. twice possible. At the same time, very flexible repayment rates of 1 % to 10 % p.a. are possible with ING. With ING, changing the repayment rate is much easier than with the savings bank, which still uses cumbersome paper letters.
In the ING*, on the other hand, you can simply change the repayment during the term in Internet banking under "My mortgage". Under the same menu item, you can also create a new repayment plan directly after the change. This way, you know what the new rate will mean for you.
The change of the redemption is done conveniently at ING via online banking.
However, ING is not only convincing when it comes to changing the repayment rate. For example, the bank also lands in the Construction financing comparison has been in the top ranks for many years. In addition, there are always attractive offers with reduced promotional interest rates with ING's construction financing. You can save over this link check if there is currently a short-term promotion available.
advantages when changing the redemption
If money is tight due to changed circumstances (e.g. new children), you can still afford the loan with the repayment rate change. If, on the other hand, you are doing better financially, you can also change the repayment rate upwards during the term. By being able to change the repayment rate during the term of the loan, you remain flexible. Alternatives to changing the repayment rate are unscheduled repayments or a temporary suspension of repayment.
Disadvantages when changing the redemption
The disadvantages of the more flexible loan with adjustable interest rate are, on the one hand, the increased effort at the bank. For example, changing the repayment at some branch banks (e.g., Sparkasse) is still only possible manually by letter. On the other hand, the flexibility means that the bank now has to find ways to invest the money elsewhere after an unplanned repayment.
Both of these reasons mean that loans where you can change the repayment during the term are usually Slightly more expensive are. Some banks charge the costs with the interest rate, while others show them explicitly.
Conclusion: Change redemption during the term
The right to change the repayment during the term gives you flexibility. Some banks such as Sparkasse, Volksbanken and ING allow you to change the repayment rate free of charge. However, there are usually restrictions on how often you can change the repayment during the term of the loan. If you make individual arrangements with the bank, you should ask for a reduction of the interest rate in exchange for the loss of the right to change the repayment rate.
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Disclaimer: This is well researched but non-binding information.
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