Bank expects a 7% mortgage interest rate

I had a phone call today with my savings bank advisor, who wants a self-disclosure from me regarding a trivial construction contract that I am currently about to use for photovoltaic (40K building savings contract, 20K saved and 20K loan). (Was that always necessary with such amounts?) Of course it might be, but it surprised me a little. In the conversation he briefly wanted to know how high our remaining debt is, as the follow-up financing is due in 2025, because the savings bank is now calculating 7% interest for the future. Of course it might be that the savings bank is especially cautious here, but I could imagine that with a remaining debt of around 200-300K at 7%, it might not be very funny for some, or rather the combination of loan costs, living expenses, etc. that the banks are calculating here could exceed the limit and actually cause the follow-up financing to fall through.

At 7%, there is no longer any need to worry because the economic location Germany will no longer exist. Even now, at 3 or 4%, one must seriously ask how the federal budget will in the future be able to raise 40, 50 billion EUR or more solely for interest.

Regarding follow-up financing, I don’t see it that pessimistic either. Wages are currently rising quite significantly, and then financing is done not over 10 but over 25 years. Even retirees can still pay installments. And many will learn that life is possible without a third car and an annual holiday in the south.

The alternative would be a rental apartment... whether it is ultimately cheaper? That remains doubtful...

This is a completely normal future calculation. Most banks do it this way - we calculated with 4% interest before the rising rates and are currently at 5.5%. Plus repayment of course.

This is a completely normal future projection. (...)

At least if you only have a ruler which you somehow place averaged in the chart.

This is a completely normal future calculation. Most banks do it this way - we calculated with 4% interest before the rising interest rates and are currently at 5.5%. Plus repayment of course.

Yes, I could have accepted 5.5% as well, but 7% is really very cautious.

I received an offer with 5% interest today... Our complete renovation thus differs from the individual measures. I am curious to see how it will continue.