The loans for real estate financing are becoming cheaper. Who is wise to secure from the low level for a long time. There are but few things to consider.
The decline interest rates on mortgages and falling. For some time, property owners rub their eyes in the face of conditions under which the buyers can finance the dream of homeownership today. But with the further expansion of the low-interest rate policy of the European Central Bank interest rates to fall further still. The banks reporting the FMH financial advice their conditions, calculate an interest rate of 1.04 percent for the five-year fixed interest rate on average – as little as in the past 5 years than ever before. With longer rate fixation of over 10 or 15 years, the average interest rates have almost reached a year ago following a temporary slight increase in the lows of.
Homebuyers can benefit in this way from the investment crisis of the banks and insurance companies. The longer the ECB, the interest keeps in the basement, the harder it is for them to find yielding investment opportunities, and the greater the willingness to surrender the money very favorable to the homeowners. Bundesbank board member Andreas Dombret warned the banks and savings banks before then, do not spend the money with too large hands and for too long periods. The homebuyers can Spendierfreude but of course only be good.
Forward loans currently very popular
Also for the very long fixed interest, he has currently access not really deep into their pockets. According to comparison charts, more than one institution can be the same on so long fixed interest rates and calculate paying interest to 2.3 percent, depending on the size of the loan should be and how much money he brings, even less. Also well-known names such as Hypo-Vereinsbank, Santander or Comdirect appear here in the front ranks. But to bind to such a long time also has its pitfalls. Because no one knows when and how much to increase interest rates again. If they are in ten years more than 2 percent, the borrower would be better advised to take out a 10-year revolving credit to lower interest rate, even to pay off in time a larger part, and to finance the lower rest at the then prevailing market interest rates.
Property owners, which in a few years pending the follow-up financing, like grabbing the moment to forward loans, so it has secured a contract with the bank’s current interest rates for the time of its follow-on financing from. But even here, those interested should carry count exactly – because due to the bonuses, with which the bank can pay the security, to such an agreement by no worthwhile for everyone, as Max autumn has recently calculated by the FMH financial advice with concrete examples. Who needs a follow-up financing as early as next year, is on the safe side, because for him to offer very affordable options: Currently, the average amounts Forward-charge for twelve months lead time to 0.1 percent. A connector loan over 10 years becomes more expensive by a mere 1.3 to 1.4 percent.
Slightly different is the situation when the follow-up financing in 2018 or 2019 is pending. In these cases, the average forward premium is 0.35 and 0.6 percent a year, as autumn writes. A connector loan over 15 years become more expensive as an average of 1.75 to 2.1 or even 2.35 percent a year. Here, each borrower must decide for themselves how likely he holds a rise in interest rates on these brands also. “The policy of the European Central Bank indicated in our opinion rather indicated that interest rates will remain very low in this time frame,” writes autumn.
Not have to worry about interest rate developments
He and his colleagues have also re-examined, for whom has really paid off in the past three years of the conclusion of a forward loan. Compared to the normal customer only those forward customers have won, who signed in the absolute low-interest rate period, 2015. All other customers would have 8 to 20 percent too expensive finances.
A long lead time poses a double risk. On the one hand, uncertainty is particularly high, as the market interest rates evolve until the entry into force. Second, the interest rate spreads, with which the bank can pay the hedge jam together at a very high mountain. As required by financial institutions from customers placing forward loans over 5 years, according to the fall currently on average a premium of 0.95 percentage points. This drives the effective interest on a loan of 150,000 euros and 15 years of 1.75 to 2.7 percent a year. The only worthwhile if interest rates in five years actually are above 2.7 percent. Is the loan will still be had for 1.75 percent, the forward hedger is far worse off than the borrower who has decided not to hedge. His remaining debt is then at the same high rate of repayment 39,000 euros – and 16,000 euros higher than if he had taken any security.
That is precisely the crux of forwarding loans. As so often, the customer enters into a bet with his bank basically. At the same time, he buys and serenity. Because the forward loans once completed, it must not continue pondering how interest rates are going well developed. And at a surcharge of 90 euros a month.