Consciously choose a higher initial repayment due to cheap building money

building money funding

Consciously choose a higher initial repayment due to cheap building money
Consciously choose a higher initial repayment due to cheap building money

Budding homebuyers have every reason to be happy. Thanks to the low market interest rates, they are able to finance their projects on extremely attractive terms. The building money is cheap, which makes it possible to take out larger loan amounts even with a smaller income.

Due to the low mortgage interest rates, the loan installments are manageable - at least if borrowers stick to the minimum repayment. Most banks require an initial repayment of just one percent or one and a half percent. Many people use this opportunity so that the financial burden of the financing is very low.

However, the low interest rates have a disadvantage. The so-called annuity (this is the repayment portion of the loan installment) can hardly increase over time. The higher the loan interest rate, the greater the scope. As a result, the low market interest rates lead to long repayment periods. Anyone who takes out a loan today and opts for an initial repayment of just one percent can look forward to a repayment period of almost 50 years with unchanged conditions.

However, the majority of borrowers cannot afford this. The experts at www.baufinanzierung-info24.de therefore think it makes sense to have paid back the majority of the loan by the time you reach retirement age. It is even better to retire debt-free, as this is usually accompanied by a decline in income.

For a faster repayment, it is therefore advisable not to leave it with the minimum repayment. It is better to start with at least two percent initial repayment or to choose even higher values. The additional financial burden is often not that great, but the effect on the duration of the financing cannot be overlooked. The repayment period can be shortened by several years.