Registered mortgage

Book-entry mortgage - A book-entry mortgage is a mortgage secured solely by an entry in the land register - in contrast to a certificate-based mortgage, where a physical mortgage certificate is also issued. Today, the book-entry mortgage is the standard form of real estate financing, as it is more cost-effective, faster, and more secure than the certificate-based version.

Difference from a written land charge

With a written land charge, in addition to the land registry entry, a land charge certificate (deed) is issued, which functions as a security. The transfer of the land charge to another creditor can be effected by handing over the certificate with a declaration of assignment - without any change to the land registry. With the registered land charge, the transfer occurs solely through entry in the land register, which offers greater transparency but requires a land register application.

The registered land charge is entered in the land register with the notation “without certificate”. The advantages over the certificate-based land charge:

• Cost advantage: No fees for issuing the deed (saves approx. 25% of land registry costs)
• No risk of loss: There is no physical deed that can be lost, stolen, or damaged
• Transparency: Every transfer requires a land registry entry and is thus visible to all parties involved
• Faster processing: Eliminating the need to issue a deed speeds up the registration process

Land charge and loan agreement

An important legal distinction: Unlike the former mortgage, the land charge is not accessory, meaning it is not necessarily tied to a specific loan claim. It continues to exist as an independent right even after the loan has been fully repaid. This allows for flexible reuse: After the first loan is repaid, the registered land charge can be used as collateral for a new loan through a simple assignment-without the need for a new notarial creation or land registry entry. This typically saves 300-800 euros in notary and land registry fees for follow-up financing.

Significance in Real Estate Financing

In modern real estate financing, the book mortgage is used almost exclusively. The bank has a book mortgage entered in Section III of the land register and thereby obtains the right to foreclose on the property in the event of default. After the loan is repaid, the bank issues a cancellation authorization, which allows the land charge to be canceled or-if further use is planned-to remain in place.

Book Land Charge vs. Physical Land Charge - Comparison

Feature	Book Land Charge	Physical Land Charge
Land registry entry	Required	Required
Land charge certificate	No (note “without certificate”)	Yes (physical document)
Costs	Cheaper (no certificate)	More expensive (certificate fee)
Transfer to new bank	Only via land registry entry	Via certificate + assignment (without land registry entry)
Risk of loss	None	Loss of certificate possible (public notice procedure)
Transparency	High (every transfer visible)	Low (possible without certificate)
Current industry standard	Predominantly (>95% of new orders)	Rare (existing portfolios)
Reuse after repayment	Assignment to new bank	Transfer of deed + assignment

Costs at the Nuremberg Local Court for registering a book-based land charge of 300,000 euros: approx. 600-800 euros (land registry fee). The deed fee would amount to an additional approx. 150-200 euros.

Practical Tip for Property Owners in Nuremberg and Franconia

We recommend that borrowers in the Nuremberg metropolitan area explicitly agree to a registered land charge (without a deed) when establishing the land charge-this saves approximately 50-150 euros in land registry fees and avoids the risk of losing the deed. After the loan is repaid, you should request the bank’s authorization for cancellation and keep it in a safe place, but do not have the land charge deleted immediately-it can be reused for future financing by transferring it to the new bank. If you still wish to have it deleted, you will pay a fee of approximately 30-150 euros to the Nuremberg Land Registry, depending on the amount of the land charge. Obtaining the land charge, on the other hand, costs nothing and offers maximum flexibility.

Frequently Asked Questions

Can I convert a registered land charge into an unregistered land charge?

Yes, an existing registered land charge can be converted into an unregistered land charge through a notarized application for cancellation of registration. The land charge certificate is collected and destroyed. The costs are low (notary and land registry fees of approximately 50-100 euros). This conversion is particularly worthwhile if you want to ensure that no unauthorized transfers of the certificate can take place.

What happens if the land charge certificate is lost?

With a registered land charge, a time-consuming public notice procedure must be carried out at the local court to have the certificate declared invalid. The procedure takes at least six months and costs several hundred euros. With a book land charge, this risk does not exist-another advantage of this form. Anyone who has a registered land charge from the past should keep the certificate in a safe place and pay close attention to its whereabouts when moving.

Is a book-based mortgage just as secure as a certificate-based mortgage?

From the bank’s perspective, the security is equivalent-in both cases, the mortgage is registered in the land registry and grants the same right of foreclosure. The book-based mortgage actually offers greater protection against misuse, as a transfer is only possible through land registry entry and not by simply handing over the certificate. Today, banks almost without exception prefer the book mortgage-not least because it simplifies the process for all parties involved.

What happens to the book mortgage when switching banks after the fixed-rate period ends?

If a fixed-rate period expires and the borrower switches to another bank, the existing book mortgage must be transferred to the new creditor. This is done through a mortgage assignment: The previous bank issues a declaration of assignment, which is notarized and registered with the land registry office. The costs for the notary and the land registry office typically range from 200 to 600 euros, depending on the amount of the land charge-significantly less than establishing a new land charge, which would require a full notarial certification. In the Nuremberg metropolitan area, we recommend that borrowers switching banks opt for the assignment of the existing registered land charge rather than establishing a new one. The new bank must agree to this procedure-most banks accept an assignment because it is more cost-effective and faster. Important: The assignment must be prepared before the end of the fixed-rate period so that the new financing can begin seamlessly and there is no delay in the land registry entry.

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