I knew that the repayment rate is changeable, but no, this is about the loan interest rate. According to his statement, this is still very favorable for existing customers. That's why I ask, where is the catch.
can you maybe say something about this?
Thanks
A change is basically always possible, you just have to take a closer look at the framework conditions...
As already explained, look more closely at the conditions.
Because it often looks like this:
lower interest rate = higher required savings = the customer must first save 50% of the building savings amount (building saver 300k, save 150k, 150k loan)
and also repay faster (6-7 years)
here the building society gets more capital for little money (0.10% credit interest or even 0.00%)
higher interest rate = less savings required = customer pays in only 30%, gets 70% loan (my example then 90k savings, 210k loan)
and then the customer can repay more slowly, i.e. 10-17 years
here the building society naturally earns significantly more, so why should they give that up.
Arguments for something like this?
due to the change there are new closing costs (because of the new contract) and the customer also has to pay in more (cheap capital) and repay faster (so the building society also gets the capital back faster)
often there are additional costs in the contract, such as "disagio" on the loan, i.e. another 2% when the customer uses the loan (which may not have been included in the old contract... if you then recalculate the 2% over 6-7 years, that already makes 0.28-0.33%; if you then again assume closing costs of 1-1.6%, we are rather at a markup of 0.43-0.60%, and then no longer at 1.60% but effectively at 2.03-2.20%; which is still cheaper, but if the customer has to repay the loan in 6-7 years instead of 10-17 years, it's quite a bit...)
and the customer pays disagio and closing costs in one lump sum, i.e. here a bigger chunk comes in as income initially... the 1.60% spread over 6-7 years then does not bother much)
Therefore, possible? YES
Better for the customer or the building society? you have to take a closer look at the conditions