First financing offer

You can sit down at any time and agree on a fixed interest rate period if you feel it is necessary.

The variable interest rate with us is only intended to bridge a few months on a partial amount (sale of the apartment after moving into the house). It is reviewed every 3 months and adjusted up or down if the interest rate development changes by more than 0.1% (or it was 0.15% – I would have to check the documents).

10 years fixed is not much more expensive, so personally I would not want to have the entire financing run on a variable rate.

5 yrs at 1.30%
10 yrs at 1.53%
15 yrs at 2.02%

I'm quoting myself and hope it's okay to add to this here.. We are currently in talks with two banks. I shared the numbers from earlier this week with the other bank and have now received the following counteroffer:

5 yrs at 1.11%
10 yrs at 1.52%
15 yrs at 1.95%

That really makes us think about whether we should just fix the rate for 5 years and repay like crazy. If interest rates rise in the long term, as everyone says, then maybe fix again for 10 years in 5 years instead of going directly for 10 years now and having to refinance then. I wish I had a crystal ball.

That is exactly the danger why we will see many forced auctions in 5 years! The low interest rate is there to lock it in for a long time. Ask around among homeowners in your circle of acquaintances, they have had 10-15 years with an interest rate of 3% or more (for example, my brother-in-law 4 years ago). So why only do 5 years today at an interest rate of 1.95%?

5 or 10 years ago, one should have chosen a 5-year fixed interest rate and then hoped that interest rates would fall. But what do you hope for with a 5-year fixed rate? If many advise you to go for 20 or 30 years, you want to go for 5 years.

Repaying as much as possible is always a pious wish. Once the money is in the account, it is gladly spent on other things. I wouldn't want to have to refinance after just 5 years.

That is exactly the danger why we will see many forced auctions in 5 years!

10-15 years with an interest rate of 3% and more (for example my brother-in-law 4 years ago).

But what are you hoping for with a 5-year fixed rate? When many advise 20 or 30 years, you want to go for 5 years.

Repaying as much as possible is always a pious wish. Once the money is in the account, it is often spent on other things.

I will quote piece by piece and answer the four parts:

1. That may be true, but we will not be among the many. Those who can only bear the interest of a short fixed rate now will fall flat in 5 years, that is correct.

2. I actually took out a 5-year loan at 3.2% almost 4 years ago, I know the development of recent years.

3. I assume that interest rates will rise in the long term. It’s a crystal ball, but let’s assume that in 5 years the level will be around 3% again and in 10 years around 5%.
It is better to take 5 years now at 1.11% and then fix for another 10 years at around 3% in 5 years than to fix for 10 years now at 1.5% and then refinance in 10 years at an interest rate level of around 5%. That is what I hope for with a 5-year fixed rate.

4. Analogous to point 1. What other people do interests me less. I am interested in what I do, I know that and I can influence it. And I already have experience from loans for a condominium and for land. We are very disciplined with our finances and have consistently made special repayments. Binding one loan for 5 years and one for 10 years, combined with continuing regular special repayments, and the thing is paid off in these total 15 years. I do not need a 20 or 30 year fixed rate, that would be unnecessary costs for unnecessary security in my opinion.

I assume that interest rates will rise in the long term. It's a guess, but let's say that in 5 years the level will be around 3% again and in 10 years around 5%. It is better to take 5 years at 1.11% now and then fix for another 10 years at around 3% in 5 years, than to fix for 10 years now at 1.5% and then refinance in 10 years at an interest rate level of around 5%. That is what I hope for with a 5-year term.

Have you done the math? Also for the 15-year fixed interest rate as a comparison?

Why are you asking for help here when you obviously already know exactly what you want? This binding for 5 years and then binding again for 5 years and so on would be nothing for me. Of course, the interest rate of 1.11% is sexy, but after 5 years almost nothing is repaid (excluding special repayments).

Binding for a short period at low interest rates actually lacks any logic (10 out of 10 financial advisors will tell you that). If you don't need the security of the long fixed interest period, then stick with the 5 years.

Regarding your point 3. You are aware that you cannot fix the follow-up financing only after the 10 years have expired, but much earlier, right?

Let's say the interest rate rises to 4-5% in the next 5 years due to a real estate bubble or whatever the reason, then you have to refinance at 4-5% and I still have a nice 1.9% for another 10 years.

But since you have already decided on the risk variant, any discussion about it is pointless.