Apr - 22
2018

Munich – The historically low interest rates have motivated many Germans to finance their home. When concluding loans, consumers should not ignore fixed interest rates.

 

Picture: Happy Family 

After all, anyone who has not been able to afford a house can not do so even in the current low-interest phase, warns the Bavarian consumer center. Consumers need to remember that the contract for a home loan usually runs for the next 10 to 15 years.

Thereafter, the fixed interest rate ends, but the house is usually not yet paid off. In other words, then a new loan agreement will be necessary, of course at the then applicable interest rates, which may be considerably higher. So if homeowners can afford the low interest rates just now, higher interest rates later make it hard for them to do so.

Seek as long as possible interest rate fixation

In addition, one sees the own financial situation too rosy fast: Because the expenditures, which come together over the year, can be partly difficult to estimate: Costs for food, free time, clothing, gas, electricity, old-age provision, for example, must be estimated as accurately and self-critically become. And do not forget: sometimes more unplanned expenses are added, but it takes reserves.

Combined offers, where builders not only buy the property by credit, but at the same time also buy shares and equity funds, are associated with risks: Of course – for profits, the loan can be repaid faster. But exchanges not only know the way up, warns the consumer center.

The tip: Anyone who comes to the conclusion that they can afford the loan, should think about the longest possible interest rate and the highest possible eradication. Those who repay as much as possible on a monthly basis are debt-free faster and no longer have to worry about the risk of rising interest rates. However, then the monthly budget budget is smaller.

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