Real estate buyers and home builders are borrowing more money from the bank again: the average loan amount for financing home ownership has been approaching the 300,000 euro limit for a long time, reports the credit broker Dr. Small. At the same time, the monthly rates are falling – the recent fall in construction interest rates makes this possible.
Loan amount increases
Specifically, the loan amount in December 2023 was an average of 297,000 euros. “The amount that property buyers take out to finance their own four walls has increased by 9,000 euros compared to November 2023,” reports Dr. Klein boss Michael Neumann. The increase is even greater year-on-year: in December 2022, borrowers accessed 281,000 euros.
Lowest value for standard credit rate
Those from Dr. The standard rate determined in December reached the lowest level of 2023 at 1,435 euros.
The value – calculated for a loan amount of 300,000 euros, two percent repayment, ten-year fixed interest rates and 80 percent loan-to-value ratio – has fallen by 105 euros compared to the previous month (1,540 euros in November 2023).
Neumann: “At the end of 2023, you can purchase your own four walls with a comparatively lower monthly burden.”
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Redemption
At the end of 2023, the initial repayment rate increased only minimally: the average repayment in December was 1.87 percent (comparison November: 1.81 percent).
Neumann: “Borrowers are currently mostly using the recently significantly reduced building interest rates to achieve an affordable monthly payment and/or to take out a higher loan. The favorable conditions are hardly used to repay the loans.”
Even if that could make sense: Ideally, a good repayment would be two percent or more in order to really reduce the total loan costs and noticeably reduce the remaining debt.
“But of course, construction loans must first fit the buyer’s wallet. Nevertheless, you should always keep an eye on the overall burden that has existed over decades,” says the Dr. Klein expert to BILD.
Attention: The less you repay from the start, the longer it will take to pay off your remaining debt.
Sample calculation for current best interest rate: 3.29 percent 300,000 euros loan amount, 10 years interest rate fixation, 1.87 percent repaymentMonthly installment 1290.00 eurosRepayment made 66,322.95 eurosRemaining debt after 10 years233 677.05 euros
fixed interest rates
Just three years ago, the average fixed interest rate was between 13 and 14 years; most recently it was only eleven years and two months.
“Even though the fixed interest rate has fallen significantly, borrowers still rely on the ability to plan and protect themselves against the risk of interest rate changes given the currently long period of time,” analyzes Neumann.
2024-01-30 16:31:53
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