Real Estate Loan Convenient
With these tips, you can get more out of real estate loans and save money. Expensive real estate loans cost twice as much as cheap ones. “Real estate financing has become cheaper again on the marketplace.
The competition among banks in the lending business is still large. In 2018, the effective interest payments for real estate loans continued to decline. This is confirmed by the most recent key figures of the Best bank Credit Index. Since the beginning of 2018, the variable margin bank has fallen from 1.487 to 1.338 percentage points. According to a report by the credit broker Best bank, this is close to the June 2017 low.
Bank surcharges is currently particularly striking
The small spread of these bank surcharges is currently particularly striking. In the market test, these are between 1.25 and 1.625%. According to Best bank, the regulators have also taken a new influence, as it is currently more difficult for credit institutions to differentiate themselves according to credit standards: “The credit offers have become somewhat more uniform in the fourth quarter of 2018, as the FMA now plans the precise implementation of the mortgage credit.
Whether the borrowers can finance the credit permanently and thus also in the pension, the lenders must examine carefully “, so the Best bank experts.” In the real estate credit segment for creditworthy consumers, the firms now compete more strongly On conditions, especially since they no longer have much room to differentiate themselves through product design, the report goes on to say.
Between 2018 and 2019, interest rates on real estate loans declined on average in both fixed income and variable loans. The average effective payment for fixed-interest offers at the beginning of 2019 was USD 429.33 per annum over a ten-year period instead of USD 432.60 at the beginning of 2018 (2.26% instead of). Nominally it went from 1,892 to 1,823.
Credit institutions were far less willing
The effective portion of the variable option decreased from USD 396.90 to USD 390.74 (1.43% instead of). Nominally, an average interest rate of 1.028 instead of 1.158% was calculated. In terms of fixed interest rates, credit institutions were far less willing to offer more favorable conditions: although the 10-year reference rate bank swap rate has fallen by 0.24 percentage points, most banks have not passed on the price reductions for new ten-year contracts.
Previously, banks had long been promoting particularly favorable conditions for fixed-income loans: after the obligatory forwarding of negative key interest rates for fixed-income mortgage loans to consumers, the fixed-income sector was able to achieve significantly higher income.