First financing offer

Thank you very much!

If I now see the value 0.77 for 10 years, for example: if the value gets smaller (e.g. 0.73), my loan potentially becomes cheaper / interest rate lower; if the value gets bigger (e.g. 0.81), my loan potentially becomes more expensive / interest rate higher. Is this interpreted correctly?

And I assume that a point change in this swap is not equivalent to a point change for the loan from the bank to the end consumer - otherwise it would be too easy - right?

Thanks again and best regards.

To the first question: yes

To the second question: yes and no
There are banks (like us - although we actually refinance exclusively through covered bonds/on the market and not through customer deposits) that provide daily current conditions, which are only valid until 4 p.m. Other banks respond only when there are larger market changes - in those cases, it affects the banking margin either negatively or positively.

Understood, thank you.

If I now tell my Sparkasse advisor that the swap has fallen by 5 points since October and that I am therefore calculating with 1.60 instead of 1.65, assuming the other parameters remain the same, he will probably laugh and/or shrug.

Best regards

Could be, but doesn't have to be. As a rule, he will look at his smart table on a daily basis, in the same place as three months ago, and tell you this condition. My expectation would be that the condition is about 3,4,5 points cheaper.

Because most banks nowadays react almost daily, or at least weekly.

Since the [Liqui-Kosten] have indeed dropped a bit, there could be one more point in it. But very few banks really price in every single component of the condition daily.

Hello,

we now have another offer. I had hoped that it would be somewhat better than the first offer from October. I did not expect the difference to be this big.

It is, as with the first offer, an 80% financing with 5% interest + repayment.

Offer Bank A including option for 5% special repayment per year (Oct. 2015):
5 years = 1.45%
10 years = 1.87%
15 years = 2.38%

Offer Bank B including option for €5,000 special repayment per year (Jan. 2015):
5 years = 1.20%
8 years = 1.54%
10 years = 1.64%
15 years = 2.14%

Unfortunately, the special repayment is capped at €5,000 and is not negotiable; the possibility of a bit more would have been nice.

For only marginal changes since October, the numbers differ widely. Are the numbers from Bank B now "market-appropriate," or is this a case for snapping up the offer without hesitation?

Thanks and best regards

Does no one have an assessment or perhaps comparable values from recent times?

Best regards