Own home: interest rate development / interest rate / interest rate increase / conditions

We have now finalized our house with 4% repayment (2.1% repayment and 1.9% interest) over 20 years. Of course, there will still be a huge amount left at the end. But with some special repayments and so on, there won't be much left in the end. And we will settle that in 5 years. Then the interest rates won't play a big role anymore.

The interest rates are rising at the moment, we just signed on Thursday. The financing advisor says that customers inquiring now would have to pay about 0.3% more than we still got. So we concluded the deal at exactly the right time. We are with the local Sparkasse, but on the internet there would have been about 0.1-0.2% better interest rates. However, with the Sparkasse it goes much more smoothly and we can finance all sorts of extras (e.g. a kitchen for 12,000).

Interesting, and I thought kitchens couldn’t be financed because they are furniture? I have heard of developers who offer the kitchen as well.. I also understand that they have included the price beforehand, but that the banks tolerate this. Well, I think we might do that too

Regards

You can even co-finance a Ferrari for the garage if the [Rahmenbedingungen] fit.

Alright... the Ferrari is a different matter, it does represent a certain value, the kitchen does not... or why else would the banks refuse to co-finance it?

The same applies to the kitchen (as with the Ferrari): if the framework conditions are right, the bank will go along with it.

It is a matter of affordability and security or a combination of both in connection with the repayment period.

Anyone who wants (or has) to finance with 1% repayment today will certainly not get a kitchen on top. But whoever puts 5% repayment on the table... who cares about 10 or 15 extra for the kitchen.

And even a worthless Ferrari or a world trip can be co-financed.

I am curious how the construction companies want to react when interest rates rise again. Back then, when people were dealing with 8% interest and 1-2% repayment, it somehow worked. So the costs must have been significantly!!!!! cheaper back then compared to today. Otherwise, how could one have managed 10% per year. If interest rates now rise to 3-4% again, nobody can afford a house with the current construction costs.

Interest rates are low, but in proportion, a financed house has not become cheaper than 20-30 years ago. Those who can even pay in cash are currently the ones out of luck.