At least one good thing brought the global financial crisis with it. It led to a significant decline in market interest rates, which has since particularly benefited home builders and homebuyers.
At that time, the interest on a real estate loan was around 5 percent, today aspiring borrowers pay around 1.5 percent on average. Considering the average loan sums, this results in a considerable saving.
Over the years, the development of mortgage rates has only one direction, namely the way down.
The interest rates have fallen almost continuously, which has led to today’s favorable financing offers. However, this could be over again in the foreseeable future. It is clear that the low-interest phase can not last forever.
Interest rate assessment of the experts
This opinion is shared by several experts. A large financial service provider has asked interest rate experts from 10 banks for a market assessment. Specialists should indicate the development of mortgage rates.
The result is clear: for the time being, the construction field will remain cheap. However, interest rate experts expect interest rates on real estate loans to increase in the medium to long term.
For the time being, the interest rate experts expect a moderate increase in interest rates. In other words, we are unlikely to see extremely high mortgage rates (of 9 percent, for example, as we had in the 1990s). But a return to interest rates, as we knew them before the global financial crisis, can not be ruled out.
Consequences for builders, buyers and property owners
Should market rates actually pick up in the coming years – which is quite likely – this will not be without consequences. Below we have explained what individual groups have to respect.
Builders and buyers: Who wants to build or buy in the foreseeable future in your own home, is probably better advised not to delay the project unnecessarily. The sooner this step is taken, the greater the chance of being able to finance at particularly favorable interest rates. If you want to wait a few years, you may have to cope with a significant increase in interest rates.
Property owner: Anyone who already owns a home may still pay back his real estate loan. The risk of a possible increase in mortgage rates is that an expensive follow-up financing threatens.
Because only a few builders and buyers opt for a Volltilger loan. Instead, mostly 10- and 15-year fixed-rate loans are concluded. In other words, a follow-up financing is due in a few years. If the interest rates rise in the meantime, it may be really expensive.
Financing low-interest rates and securing long-term conditions
However, these risks can be limited. On the one hand, there is the timely completion of mortgage lending. Our independent finance experts are happy to check if and on what terms you will receive financing. Here we can evaluate conditions of more than 400 banks and consider them, so that you finance low-interest.
We support owners in follow-up financing. We are happy to check which interest rate risk exists in order to determine the best solution. For example, forward loans could be a practical means to hedge against rising market rates.
You got curious? Then just ask us, our advice is free and without obligation. You take no risks and can always decide for yourself whether and with whom you finance.