Banks must require more collateral for real estate loans

I don't understand why it should be bad if the loan agreements are long-term. It is argued that the follow-up financing could become a problem - but (assuming the same repayment) after 15 years you have less debt than after 10, and therefore less worries? Surprisingly, that apparently significantly more than half of the loans are not secured by the property value. I thought over 100% financings are the exception, at least in the area of owner-occupancy.

well not really. it depends on the repayment and special repayments. if you repay little and choose a short fixed interest period, then the boomerang comes back with the follow-up financing

well, not really. it depends on the repayment and special repayment. if you repay little and choose a short fixed-interest period, then the boomerang comes back for the follow-up financing

That's why you don't do that in the first place

You seem to be mixing things up, the customer perspective and the bank perspective.

The advantage or security with fixed interest rates longer than 15/20 years lies with the customer, the risk lies with the bank. These variants are increasingly being signed and only a few are short-term anymore.

Banks usually refinance themselves over 10 years but price in higher margins for longer fixed interest periods because the customer can terminate long-term funds prematurely according to the Building Code §490, which mostly does not happen if the interest rate level rises again. Nevertheless, the bank has to take part of these margins as risk provisions into equity because it will have to refinance itself more expensively in 10 years if interest rates rise while the customer still retains the favorable interest rate for longer.

This is a problem for the banks, less so for the customers and consumers, and the regulators have been called to action and are indeed intervening.

well, not really. it depends on the repayment and special repayment. if you repay little and choose a short fixed interest period, the boomerang comes back for the follow-up financing

Very few consumers commit to short fixed interest periods and if they do, or if it is desired, this is taken into account or somewhat secured in the creditworthiness check through the interest rate risk assessment.

A consumer who only meets their household allowances and chooses a 5-year fixed interest period with lower interest rates and a lower application, possibly with even lower repayment, will not get a loan approval at all!!

That's why you don't do that

Well, a good financial advisor always points this out to the client and advises incorporating 3% or more.

However, since the volume (as stated in the article) of loans per customer is increasing, driven by price increases, and financings are becoming increasingly scarce, 2% or less is usually chosen after all.

Inflation or construction prices have meanwhile decoupled from salary increases. These are significantly below.

Surprising that well over half of the loans apparently are not secured by the property value. I thought financing over 100% was the exception, at least in the area for owner-occupiers.

It states "fully" = means financing is secured by 60% of the lending value. The statement therefore only means that more people finance more than 60% of the lending value. Could be 61% or 300%. So no real significance.