For mortgages, in the choice between fixed- and variable interest rates, fixed interest rates might be more expensive on average, but variable interest rates carry a higher risk (for example, see finanzcheck, mcmakler, or this question). For fixed interest mortgages, banks charge a prepayment penalty, so the borrower cannot (fully) exploit an increase in income to pay off the mortgage more quickly. How is this for variable interest mortgages? I expect an increase in income in coming years, so it would be interesting to increase our monthly payments; but this is not useful if the prepayment penalty is as much as the interest we would save by paying off the mortgage faster. Are prepayment penalties common or even allowed for variable rate mortgages?
According to the German civil code, §489, »The borrower may terminate a credit agreement with a variable rate of interest at any time«. Does this mean there is no prepayment penalty in this case? What applies to the case where I can't terminate the loan completely, but can still pay it off faster than planned?
I didn't find the answer in this article by the Verbraucherzentrale.