Effective interest rate - loan offer from 2 partial loans

Hello everyone,

I have received a loan offer (preliminary information) from a bank for a loan. This loan consists of two partial loans. The large loan (90%) has a fixed interest rate over 15 years (nominal: 1.50; effective: 1.51) with a payment of €1600. The small loan (10%) has a variable interest rate (nominal: 1.50, effective: 2.73%!!!) with a payment of €200. The contract states that the effective interest rate results from the registration of the mortgage and the building insurance. I do not understand this. I understand the mortgage so far. I have to pay the building insurance annually, so why does this increase the interest rate? Is the interest rate of 2.73% correctly calculated? It seems very high to me, so that I have to pay about €120 in interest at the beginning for the small loan. Does anyone have expertise and can please explain this to me? Thank you very much!

Hello everyone, I received a loan offer (preliminary information) from a bank for a loan. This loan consists of two partial loans. The large loan (90%) has a fixed interest rate over 15 years (nominal: 1.50; effective: 1.51) with a payment of €1600. The small loan (10%) has a variable interest rate (nominal: 1.50, effective: 2.73%!!!) with a payment of €200. The contract states that the effective interest rate results from the registration of the land charge and the building insurance. I don't understand this. I still understand the land charge. I have to pay the building insurance annually, so why does that increase the interest rate? Is the 2.73% interest rate calculated correctly? It seems very high to me, so that I have to pay about €120 interest at the beginning for the small loan. Does anyone know about this and can please explain it to me? Thank you!

Hello if there are still costs in the variable one, then it is calculated correctly! Basically, you pay the nominal interest within the installment. The costs are always one-time but have to be represented there for legal reasons

Is the interest rate of 2.73% calculated correctly?

No idea, since we don't know which costs were included. In the end, it doesn't matter because you can calculate yourself how much the loan will cost you over the term.

Unfortunately, I cannot give you a suitable answer to your question! However, I find the interest rate relatively very high! Have you obtained several offers? Of course, it also always depends on the equity used, income, etc.. We currently had to switch to a variable loan for the land purchase with an interest rate of 1.34%.. Therefore, I was really shocked by the over 2% now :)