Construction money has never been so cheap: real estate loans with a ten-year term currently cost an average of 0. (percent, shows statistics from the loan broker Interhyp. In 2010, home buyers had to shell out an average of four percent for their loan. Owners who want their financing to the old Have concluded terms and conditions are likely to look at the current interest rates with frustration – and wish to replace their existing loan and exchange it for a cheaper loan.
A fixed interest rate of ten years or more is usually agreed in the loan agreement. For convenience, many people wait for this period to expire before thinking about rescheduling. Experts say that they leave hard cash behind.
An example: If you took out a loan of EUR 200,000 ten years ago at an interest rate of 3.5 percent and continue to finance the remaining debt at an interest rate of 0.8 percent, you will save around EUR 20,000 over the next ten years. “Compared to the previous loan, customers often only pay a quarter or a fifth of the interest costs for follow-up financing,” explains Mirjam Mohr, who, as a member of the board of directors at the mortgage broker Interhyp, is responsible for private customer business. Even small differences in interest rates add up to a proud sum over the years. Owners save around a thousand euros with a difference of 0.02 percentage points compared to the expensive old loan, if the loan runs for another ten years after the rescheduling.
After ten years special right of termination for house loans
Credit institutions generally have little interest in rescheduling. Here, too, the reason is the lower interest rate level: If the bank gives the repaid money again as a home loan, it has to do so at a lower interest rate. So the bank earns less than if the customer finances the entire loan at the old interest rate. Anyone who pays back their loan before the fixed interest rate expires, therefore usually has to pay a so-called early repayment penalty. Exception: If borrowers took out the loan more than ten years ago, they have a special right of termination. You can then cancel your loan free of charge with six months’ notice.
Whether or not it is worth rescheduling loans that buyers took out less than ten years ago depends on the amount of the early repayment penalty. Since 2010, this may not be more than one percent of the loan amount. Before it was five percent. In practice, many bank customers still pay on top, shows a study by the Bremen consumer advice center. The consumer advocates examined 733 cases from 2017 to 2019 and analyzed how much money banks have billed their customers for early loan repayment. Result: On average, the providers demanded just over ten percent of the outstanding remaining debt as a prepayment penalty.
The market watchdogs criticize the fact that many institutions do not adhere to all the requirements of the Federal Court of Justice when calculating the early repayment penalty. According to a ruling from 2016, banks must take into account contractual special repayment rights in favor of the borrower – after all, the borrower could have paid off his loan via the special repayment without penalty. In practice, however, the banks don’t take it that seriously. “In at least eight percent of the cases examined, the contractual special repayment rights were not taken into account or the current repayment was set too low,” says Philipp Rehberg, an expert in real estate financing at the Bremen Consumer Center. Given the clear jurisprudence, that is incomprehensible.
With annuity loans, owners save the most if they do not change the amount of the monthly installments after the rescheduling. In the case of the classic construction loan, the monthly rate is made up of equal parts of an interest and a repayment part. If the loan rate remains unchanged with lower interest rates at the same time, the loan can be paid off much faster with a rescheduling.