Mortgage financing is getting cheaper: interest rates are falling below 3 percent | life and knowledge

Housekeepers can breathe a sigh of relief in November. BECAUSE: Building interest rates will drop below three percent for the first time.

Anyone taking out €300,000 in construction finance is currently paying 2.98 per cent interest. This follows from the assessment of the company Check24, in which 129 offers were obtained.

Possible high interest rate fluctuations

Consumers should take a close look. Differences in interest rates between banks of up to 73 percent are not unique. Stadtsparkasse München offers the lowest interest rate of 2.98 percent. At Volksbank Raiffeisenbank Fürstenfeldbruck, however, consumers pay 5.17 percent.

This is evident in the rate: Among the offers is 550 euros per month.

Ingo Foitzik, managing director of construction finance at Check24: “We are temporarily seeing a decline in construction interest rates.” Ten-year federal bond yields are down 60 basis points from their peak.

Consumers are borrowing less money

Consumers are borrowing less and less money to buy real estate – with higher interest rates.

On average, customers take out a bank loan of “only” EUR 235,000. This is 21 percent less than the previous year. At the same time, however, customers have to pay higher rates.

“The average monthly rate increased by 17 percent from 900 euros in the first quarter to 1,050 euros,” says Ingo Foitzik, adding: “The higher monthly rates only partially reflect the drastically increased financing costs.”

To make construction financing affordable, many customers adjust the down payment, on average, from 4.5 percent to three percent. This increases the maturity period and the remaining debt at the end of the fixed interest rate is higher.

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