In many newspapers one reads these days articles on the subject of real estate financing , which warn with raised finger to great euphoria in times of historically low interest rates.
“Without 20 – 30% equity go virtually nothing,” is there to read and the warning of the purchase of property is in those who want to protect us consumers allegedly, clearly. Right, not the interest rate should be the trigger for the acquisition of property. The object is crucial because it is supposed to be the most important place for the acquirer on a permanent or at least for one period of life. However, the low interest rate makes it much easier and above all a long-term financing and sustainable calculable . The standardized, optimal financing does not exist, but the individual realities of life are simply too different.
Types of financing
The type “Schnelltiger” reduces the interest rate risk on a follow-on financing with fast repayment and makes use of the interest advantages of short fixed interest rates. The “security type” secures itself up to the repayment end and does not incur any interest rate risk . No matter what type you are, with about 6% burden on interest and amortization you should currently expect. For a loan of € 100,000, that’s about € 500 a month.
Let’s take a not so atypical case from the advisory role of the independent mortgage and subsidy experts of TGI Financial Partners for the security type :
Sven and Birte K., both in their late twenties, still without children, now have well-paid permanent positions as engineers and teachers after a long period of training and career entry. Large reserves for the home were not possible until now. After all, a good 15,000 € are saved as seed capital with family support. More important than the amount of equity, however, is the question of how sustainable the debt service can be for financing and whether the financing offers the necessary flexibility and long-term security for changing living conditions.
The K. family has a total cost of € 200,000 to buy the house, of which € 55,000 is financed by a constant loan from the promotional bank, which is repaid in 24 years at the same rate with a fixed monthly installment of € 285. The flexibility in financing provides a Volltilgerdarlehen 130,000 € with a fixed interest rate until maturity. The minimum rate for this type of loan is 488 € for 1% repayment, but then the maturity is more than 46 years. With high special repayment possibility and multiple repayment rate change, the loan adapts to the respective life circumstances and can be repaid with higher rate almost arbitrarily fast. One thing is certain with this financing: more than 773 € family K. must not pay in the future for the financing. If more can be paid, family K. lives earlier in the paid home! Who can say that as a tenant?