Since the beginning of the year, interest rates for mortgage loans have tripled. When buying real estate, it is therefore now more important than ever to have good financing. The conditions differ not only depending on the institution, but also on the type of financing. It pays to compare.
Fluctuations in construction financing interest rates provided a small ray of hope for borrowers. In the summer of 2022, there was even a temporary decline in interest rates. Building loans became somewhat cheaper. The average loan amount rose again somewhat and now averages 300,000 euros. The standard rate for a loan of 300,000 euros with two percent repayment and 80 percent loan-to-value ratio was 1,275 euros in August. A year ago, borrowers were still paying 788 euros for a loan of this size - that was only about 62 percent of the current rate. This difference is now having an impact on the property market. Prospective buyers are negotiating the price more persistently, property sellers have to adjust their price expectations.
Anyone who wants to finance a new building project, a renovation or the purchase of a property now has several options to influence the monthly burden. One of them is the fixed interest rate. Borrowers now lock in their interest rate for a significantly shorter period than the previous year. A longer fixed-rate period costs an interest rate premium, but is also more secure than a short one. In order to realise the dream of owning their own home despite higher construction interest rates and still high property prices, borrowers are increasingly starting with a lower repayment. The average repayment is currently just over two percent. Despite higher loan amounts, the loan-to-value ratio, i.e. the debt-financed share of the mortgage lending value, remains constant at around 81 percent. Buyers therefore continue to bring a relatively large amount of equity into the financing.
Stiftung Warentest points out that building societies are currently experiencing a comeback. Currently, they usually charge 1.5 to 2.5 percent as interest on loans - no more than in the previous year. Important to know: For savers who take out a contract today, these conditions will still apply in five or ten years. More information: www.test.de/Bausparvertrag-Vergleich-5757018-0
(Photo: © Filip Filipovic, Pixabay)
