Interest rate determination term

Good evening,

I have been reading through here for a few days and have a question about financing.

The interest rates are currently pleasantly low and one would like to secure this rate for a long time.

Now we have obtained offers from our 2 main banks and both told us that you can secure the rate for a maximum of 10 years. Anything else would be unprofessional.

Is that correct? In fact, the bank with the longest term I have found so far offered 15 years.

Our construction project costs 295,000 euros, we only have just under 20,000 euros in equity.

Have a nice evening

Hello HomerJay,

if you plan to have your financing fully repaid in 10 years, a longer fixed interest rate period does not make sense and would indeed be unprofessional.

But who manages to have everything repaid in 10 years? And then a longer fixed interest rate period does make sense to protect against the interest rate risk, and at the present time it would almost be unprofessional not to offer a longer fixed interest rate period.

There are also banks that offer 20 and 30 year fixed interest rate periods.

Best regards

M. Thiemann

Thank you for the response.

Well then, I will continue to look for a bank that guarantees me the interest rates for a longer period.

Which terms make more sense, we have received offers for 10, 15, and 20 years. Of course, the longer terms are currently more expensive monthly, but for that, there is initially no risk that we will have to pay higher interest rates. Can one advise everyone on something, or does each person have to form their own opinion? I find it very difficult to decide now what will happen with interest rates in the coming years. We would be very happy to receive tips.

I am currently also dealing with the financing. Tomorrow is the next appointment. In my opinion, you should fix the rate for as long as you need to pay off the loan; only then do you have security until the end of the installments. As I said, that is my opinion, but it is probably also the one that lets you sleep most peacefully. You can cancel any loan anyway after 10 years and refinance at low interest rates. May I ask what interest rates have been offered to you? How long is the no-commitment period? Regards maccus

Effectively, we have an interest rate of 3.97% on the offer and a commitment-free period of 15 months. What conditions have you been offered so far?