Are interest rates extremely expensive with variable financing?

Hello Caroline,

I consider the result typical. Since banks are no longer allowed to charge processing fees, the interest rates for variable loans have skyrocketed. Why? Because the customer can terminate the loan again at very short notice, and the banks are left with the one-time costs for the credit check as well as credit broker commissions (for Interhyp or other brokers). The ban on processing fees is therefore fatal for variable loans or makes them unnecessarily expensive.

You asked for bank recommendations: I only know a few banks that still offer these loans at all: the DSL Bank, the DKB (only for existing customers), some Sparkasse and PSD banks. All around 3% currently.

If it is really only about bridging a few months, then the interest rate does not matter so much anyway. Much more relevant are the ancillary costs for the land charge registration, which may be incurred again in a few months (or the costs for the assignment of the land charge).

Best regards Andreas Wenzel

We did it this way because the dream property was for sale last year, but we didn't yet know who we wanted to build with and didn't want to stress ourselves about it. DSl-Bank, currently 2.81% effective annual interest.

This year, however, we want to get started before interest rates rise and the KfW-Bank raises the bar at the turn of the year.

Those are already good explanations and hints. Thanks, but more are welcome if anyone has anything else :-)

Best regards
Caroline

Andreas hit the nail on the head.

In the long run, the customer pays, but nobody wanted to believe me.

In November 2014, I was offered a variable interest rate of 4% to finance the property. In the family, however, a loan was converted to a variable rate at 1.35% this month after the fixed interest period ended.... interestingly at the same bank. Although the financing amounts differ significantly.

Which bank was that?