Zinsbindung is the period for which your German mortgage interest rate is locked. Fixed periods of ten, fifteen, twenty, or more years are standard here, not exotic.
Why It Matters
A longer Zinsbindung locks your rate against future moves, giving certainty at a usually higher headline rate. A shorter Zinsbindung typically comes with a lower rate but earlier exposure to whatever interest rates do next.
When the Zinsbindung ends, the part of the loan not yet repaid — the Restschuld — is refinanced at the rate prevailing then. A loan fixed at 2% in 2020 might refinance at 5% in 2032, so the same monthly payment buys far less debt service.
Managing the Reset
- Higher Tilgung (faster amortisation) leaves a smaller Restschuld to refinance
- A Forwarddarlehen can lock today’s rate for a loan starting up to 60 months ahead
- The exposure is largest with low Tilgung plus a short Zinsbindung