Forward loan, special termination, fixed interest rate, experiences?

  • Erstellt am 2023-01-10 08:18:08

mayglow

2023-01-11 09:06:17
  • #1


No, it does not expire to my knowledge. With the falling interest rates we have had over the past decades, it was just that quite a few people used it immediately at the first opportunity.
 

Tassimat

2023-01-11 10:10:34
  • #2
Yes, and even whenever you want, so any month you choose. There is no fixed date.
 

ypg

2023-01-11 16:18:01
  • #3
I will try to give a layman’s explanation to a layman (the bankers here got silent. But I am still grateful if someone corrects me when I say something wrong.

Somewhere I heard or read, maybe even on this forum, that the legally prescribed special right of termination applies after 10 years. Not after 11 or 12, which would make it an annually recurring special termination right, but explicitly after 10 years, and practically everyone has that.


2023/2028… Yes, because of the special right of termination. But you would have to exercise that, otherwise you would be stuck with two contracts. But someone will probably tell you that or it will be automatically clarified through the bank(s).

Regarding your original questions:

I wouldn’t call it _reacting_. You basically _secure_ an interest rate that is currently valid, believing that with this you will be fine and can sleep well until the loan ends again. But it is not wrong, of course.


You couldn’t do that with the special termination right, but with the forward loan, if you don’t exercise the special termination right, you can decide every month or day. With the forward loan option, you could decide starting in 2028 which interest rate you want to secure from 2033 onwards. But you don’t have to. You can let the time run until 2033 without doing anything. However, you could also effectively use your special termination right and already watch the interest rates daily. But: what do you hope to gain from that? So much can happen within 5 years. I would rather take a gardening book and plan something more than what exists now.


See previous answer. A forward loan gives you the opportunity to secure current interest rates during the last 60 months of a loan (for you from 2028 to 2033).



No, you can take out the forward loan wherever you want. However, a new bank “costs” submitting documents again, a review, possibly even a property inspection including a visit. Fees apply, also for certified site plans and similar.


Your special termination right is, as said, after 10 years. For example, you could also partially terminate then—assuming you have already inherited by then.
If the money windfall comes after 11 or whenever years, the bank can let you go, but doesn’t have to. If they let you go, i.e., they allow you to terminate the loan, then usually with a hefty prepayment penalty. That is usually higher than you think and could absorb your windfall. But it’s not bad to be liquid. You can park your money windfall, possibly let it earn interest, and then pay the maximum annually until the loan ends. But you could also invest in your house, a new heating system, new paint, without taking a new loan.
 

mayglow

2023-01-11 16:49:53
  • #4


As far as I know, that is not correct. After 10 years, you have the right to terminate with a notice period of 6 months. This right doesn’t just expire suddenly or anything like that. If you specifically try to google for an answer to this question, you will also find statements saying that the 10 years is a minimum period and you don’t have to catch exactly that one date now.
The legal text itself (§ 489 Building Code) contains the phrasing "after the expiry of 10 years" and yep, 12 years is still "after the expiry of 10 years."

Information provided without guarantee and in case of doubt, ask the bank or your trusted lawyer ;)
 

ypg

2023-01-11 17:28:28
  • #5

So, I asked Google, and it seems to be as you say:
Google for "489 Building Code"
fourth entry… starts with my.
My interest is not enough to read further, can manage that himself :)
 

SenorRaul7

2023-01-12 08:02:16
  • #6
Thank you! I had already googled before, but kept seeing contradictory or unclear statements. The entry states it clearly. So, long story short. Theoretically, I can already conclude a forward contract now, but with the interest rates, it makes absolutely no sense at the moment. That means I will calmly wait until 2028. If the interest rates are still that high or even higher then, I’ve just been unlucky and SKR/forward still doesn’t make sense. From then on, however, I at least have the chance to observe almost daily and react quickly. Otherwise, the follow-up financing is due in 2033 and at the latest then I have to take it as it comes at that time. That’s still 10 years away; I just hope that’s enough for the rates to at least move back towards my 1.9%.
 

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