October 14, 2026, 10:03 am | Read time: 5 minutes
Once the mortgage is finally paid off after many years, many homeowners want to remove the registered land charge from the land register. However, such a deletion involves costs and is not automatically the best decision. A remaining land charge can be useful later, such as when a new loan is needed for renovation or modernization.
Land Charge – What’s Behind It?
The land charge is the most common security banks require for granting a mortgage. “When someone buys a property and takes out a land charge, they grant the bank a lien on the property,” explains attorney Holger Freitag from the Association of Private Builders in Berlin. This means the bank can foreclose on the property if the customer stops paying their installments.
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Land Charge and Mortgage – The Difference
In everyday life, the land charge is often equated with a mortgage. Indeed, a mortgage is also a lien entered in the land register. But there are significant differences. Holger Freitag clarifies: A mortgage always refers to a specific claim and is thus linked to a specific loan. Its amount decreases with the repayment of the loan and eventually reaches zero.
In contrast, the land charge is an abstract security that can be entered in the land register without a corresponding liability. It remains in full after the loan is paid off. In classic real estate financing, banks typically use the land charge as security rather than the mortgage.
Bank’s Deletion Approval Should Be Free
“Once the loan is paid off, the bank issues a deletion approval for the land charge,” explains Sibylle Barent from the homeowners’ association Haus & Grund in Berlin. “If the owner wants to have the entry deleted from the land register, they must go to a notary, who notarizes it and sends the documents to the land registry office.”
This, of course, involves costs. The customer does not have to pay for the bank’s deletion approval. The bank is not allowed to charge fees for this, ruled the Federal Court of Justice (Case No. XI ZR 61/11). However, owners are required to cover the costs for the notary and the land registry office.
The costs for deletion arise at the notary and the land registry office. How high these actually are depends, among other things, on the registered land charge amount and the specifically required notarial services. The fees are based on the Court and Notary Fees Act (GNotKG). The nominal amount of the land charge entered in the land register is decisive, not the remaining loan amount.
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Useful for Future Financing Needs
Whether it makes sense to delete the land charge depends on various factors. On one hand, it matters what the owner plans to do with the property. “If they want to sell it, for example, it might make sense to delete the land charge and then have a clean land register,” says Holger Freitag. This makes it immediately clear to the buyer that the property is unencumbered.
However, those who want to continue living in their house and perhaps modernize it later are well advised to simply leave the land charge in place. “If nothing is done, the land charge automatically converts into an owner’s land charge,” says Holger Freitag. This indeed has advantages.
“The owner’s land charge is an empty shell that can be filled with a new loan,” says Sibylle Barent. If the owner has a greater financing need in 10 or 15 years, they can use this land charge right away. If they had it deleted, they might have to register a new land charge–with the corresponding costs.
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In Practice, Psychology Trumps Reason
This can be helpful for older homeowners who have paid off their house over decades until retirement and want to renovate it energetically later. “If they throw an owner’s land charge into the mix, it can help secure a larger loan from the bank,” says Holger Freitag.
Even before a planned sale of the property, it is advisable to consult with the potential buyer. “If they need a larger financing, they can use the existing land charge right away and don’t have to register a new one in the land register,” says Sibylle Barent. This can save time and money, especially if financed with the same bank.
“Rationally, it makes sense in most cases to simply leave the land charge in place,” says Holger Freitag. But in practice, deletion is not just a matter of reason. Psychology also plays a significant role. “Many owners feel more comfortable when the land register shows no encumbrances.”
Those who initially do not delete the land charge should carefully keep the bank’s deletion approval. If the land charge is to be deleted many years later, the document will be needed. In the case of a letter land charge, the land charge letter must also be present. Current information on deletion explicitly states that for a letter land charge, the original land charge letter is additionally required. “It is not uncommon for this document to be feverishly searched for later during the processing of a sale or in the event of an inheritance,” says Sibylle Barent. If it is not found, the owner must bear the costs for re-procurement.
With material from dpa