two years Ago, was the world for real estate buyers still in order: The purchase prices were already high, but still significantly lower than it is today. But, above all, construction loans were so low as to have never. They cost partially not even one percent interest in a year. Today, around 0.3 percentage points more must be paid for, what constitutes, due to the long maturity of the loans, substantial differences.
editor in the area of “money & More” the Frankfurt General Sunday newspaper.
F. A. Z.
The majority of forecasts assume that interest rates will continue to rise, especially in the long term. No one expected that in 15 or 20 years ago is still as low as it is today. Who is now buying a property and with a loan financed, will secure the low interest rates for as long as possible. In financial language, that is, he must choose a long interest period, for his credit. The downside: He then pays a higher interest rate than in a lower duration. In the end, it could be that a shorter bond is the cheaper version, if interest rates rise significantly.
A few examples
interest rate fixation are Compared to durations of 15, 25 and 30 years. More than 30 years, currently offers no Bank, under 15, the Institute recommends. In this period, the financial house may only require the initially agreed interest, regardless of how high the market interest rate is just. To give the real estate buyers planning security. For 30 years interest rate bond must be paid two percent interest rate, for 15 years, an average of only 1.5 percent. The exact rate depends on many parameters: in particular, the credit rating of the debtor and the amount of equity capital. Anyone who brings a no private money in the financing (100 percent financing), must accept a hefty interest premium. At 15 years fixed interest rate, on average, 0.6 percentage points are then currently to pay more than 80-percent financing (for example, 20 percent of your own money).
a Less large interest rate differences of no more than 0.2 percentage points, between the high and lower loan amounts and high and low repayment rate. High loan amounts and low repayment will then be punished with a yield premium “”. The optical low published interest rate differences add up over the long term to significant additional costs, which can amount to several tens of thousands of euros. A long interest rate fixation is therefore justified only if the interest rates rise significantly. No one knows, of course, and so the example will serve to invoices to get a feel for the risk, the real estate buyers are taking a short interest rate binding. More specifically, the test readers for your individual Situation with the specially developed “interest-rate bond calculator” at the F. A. S..
Open an example with A loan of 380 000 Euro and a 20 percent equity has shown A long interest rate fixation of 30 years is not worth it. Even if the interest rates rise to four per cent as eight years ago, it is better to choose only 15 years rate of interest. This saves 35 000 Euro in interest, and the house is even paid off a year earlier. Even 25 year bond would be too long. The interest rate increases to five percent to the normal interest rate times, before the financial crisis, 30 years rate fixation also too expensive. In this case, 25 years, however, are better than 15 years. Then the house is paid off, even a year earlier than at 30 years fixed interest rate.
A very long interest rate fixation is convenient, because one has planning security. And then, when the property is paid off, there is no risk that sharply higher interest rates make the monthly burden unbearable in the height of shoot. But the financing costs of the short bond can be significantly lower, and the increase of the interest rate risk is manageable. In addition, the customer has in binding times are under 30 years, more choice of banks. As a result, the opportunity to Negotiate increases and Compare a lower interest rate strike.