Mortgage term current interest rate

Hello everyone!

We want to buy an apartment, for retirement provision but also for tax reasons.

The financing through our savings bank is 100%, the financial requirement is 150,000.

Now our question: Does it make sense to agree on the longest possible term at the current interest rate level? And how long is it actually possible?

According to our SK advisor, fixed interest periods are only possible for a maximum of 15 years. Our offer is 3.35% nominal interest rate for 10 years fixed interest, 3.85% for 15 years fixed interest.

We would rather choose the longer (still cheaper even at 3.85%) interest rate, but we are unsure whether this makes sense. Is there any opinion on this?

Sure, I completely forgot to mention that the apartment is rented out and should remain so.

Full financing mainly for tax reasons – the rental income almost covers the interest burden this way; if we put in equity, it no longer works.

Of course, we have to be able to handle a rent default. But we would manage if necessary. Naturally, a new tenant should be found as quickly as possible then. However, when choosing the apartment, we mainly stuck to the three main criteria: location, location, location ;-)))

Hi,

does the rent only cover the interest or also a part of the repayment?

Otherwise, you first have to start repaying before at least breaking even.

Slowly, property prices seem to be moving again. In combination with low interest rates, this is definitely an option. But usually seen as an investment for existing cash assets.

For an apartment, besides the location, the property itself also plays a big role. With too many residential units, the hoped-for increase in value can certainly fail to materialize.

Due to my work, I at least have a certain informational advantage regionally, since for 7 years all purchase contracts in the municipality go through me. Still, I would have a problem recommending a location as a safe investment.

For me, a purchase would only be considered if I already owned residential property or perhaps wanted to move in myself.

A partially paid rental apartment can also have a negative impact when taking out another loan for a home of your own.

But to the actual question: the term depends on which amount can be regularly repaid. If only a small repayment is possible, I would choose the term as long as possible.

best regards fm

The repayment is at 2% and the rent covers not only the interest but also part of the repayment. We will probably also go for the long term, possibly take out a [Bausparvertrag] for follow-up financing. Then it might be possible to make special repayments later. And thank you very much for your assessment!