For real estate financiers, who have not yet secured their interest in the long term, the air is thinner. The average mortgage loan is 5 percent. Variable interest rates or loans in foreign currencies are cheaper, but a greater risk.
For real estate financiers, who have not yet secured their interest in the long term, the air is thinner. In recent days, the average mortgage rate for a neuabgeschlossene ten-year bond is the first time rose to more than 5 percent in June of 2004. Whoever is planning a home purchase or additional financing needs must continue to fear. Because the European Central Bank is expected to raise rates to 4 percent on Wednesday. Analysts expect a more or two rate hikes of up to 4.5 percent. In the medium and long-term bond yields could then continue to grow at which the interest rates for building loans are based.
Prospective borrowers and lenders connection – only the private buyers need for these purposes loans of over 10 billion euros a month – have a few options to respond to the changing interest rate environment. The most important step is the selection of the bank. Because the conditions are still significantly apart. The best providers offer a good percentage point more at a ten-year fixed interest rate of 4.6 percent, which requires expensive. In the financing of an average terraced house, the difference is more than 2,000 euros a year.
Who feared further rises in interest rates and wants to commit a certain monthly payment, can resort to forward loans. With such contracts lending rates can be saved, the only start in one, two or even up to five years. A two year completed in advance loans with ten years fixed interest rate, for example, the intermediary Interhyp currently around 0.2 percent annual rate over immediately incipient. If the loan three years agreed in advance, the interest rate premium is 0.35 percent. A ten-year loan will cost 5 percent of Interhyp while immediately incipient credit for 4.65 percent to have.
The rarely settled in Germany credit with a floating rate currently offers little advantage. For such contracts, the debtor knows the height of his precise obligation only for a few months in advance. The interest is continuously updated and mostly based on the three-month Euribor, a phrase that makes the banks themselves for the moneylending charged. One advantage is the very flexible repayment. The debtor may at any time fully repay the loan without a penalty fee. However, banks usually ask in advance a processing fee of 0.5 to 1.5 percent of the loan amount.
The best deals are currently in some regional providers, such as the Sparkasse Leipzig or the PSD Westfalen-Lippe to have. They demand the Euribor rate (currently around 4.1 percent) plus around 0.6 percent. Thus, the initial interest rate of 4.7 percent, which is at the same level as the fixed-rate loans. The variable loans have the advantage of falling interest rates immediately lead to a reduced load. Conversely, however, the debtor must pay more if the short-term market interest rate increases, which is currently expected by many analysts.
If you still can not do without the variable interest rate for the flexible repayment rules, but also wants to limit the risk can agree on a maximum interest rate. The broker Interhyp offers, for example, for ten years a ceiling of 6.5 percent and calls for a premium of 15 basis points, so that the initial interest burden of the variable loan Interhyp of 5.01 increased to 5.16 percent. This protection of the interest of the debtor may rise even under the harsh course of the market rate for the first ten years only to a maximum of 6.5 percent.
Risky is the loans in foreign currencies
The floating-rate loans are only a niche product with a market share of less than 2 percent. Even rarer and risky these loans if they are included in foreign currencies such as Swiss francs or yen. Such contracts are tempting for many real estate lenders, at least at first glance, because the interest rates are much lower. A variable rate mortgage loan in CHF is for example in the HypoVereinsbank to have currently with an initial interest rate on a little more than 3.5 percent: The CHF Libor, a counterpart to the Euribor currently set at 2.3 percent, 1, the Bank requires 25 percent annually as margin and additionally there is a one-time processing fee of one percent.
The yield advantage of more than one percent compared to conventional Euro-fixed rate loans looks tempting, especially as the franc has appreciated over the past four years by more than 10 percent. But these currency gains are not cemented. A devaluation of the franc would cause the debtor as quickly in trouble – especially when at the same time should increase interest rates in Switzerland. “These risks must be able to afford it,” warns financial advisor Max autumn.