Question about the effective annual interest rate

And I am talking about mathematics. This is not a story. And if today someone (for whatever reason) gets 4.5%, then that may not be more than 5 years ago. Furthermore, if it is supposed to be so current, your statement no longer applies because costs beyond the loan always have to be taken into account. So if there are no [Grundschulden] with the respective [KI], these costs must always be considered.

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With the building savings contract, you currently pay higher effective interest rates than with the annuity loan. However, you can secure a fixed follow-up interest rate, which is probably between 2 and 2.5%. If the interest rate in 15 years is above this rate, the calculation works out; if not, you may have paid too much in the worst case.

That is not correct. You could put the building savings contract savings into the repayment and thereby significantly reduce the total interest paid and the outstanding debt. Interest rates would have to rise above 5% with currently available offers to break even. The building savings contract currently only benefits the providers, unlike current interest rates, because not only the capital must be refinanced, but also the providers' own costs and employees must be paid.

Maybe I should mention some numbers. I planned a loan of €220,000. In my first calculation with Interhyp, I got 2.06% over 23 years and almost exactly €1000 per month. However, probably €100,000 Kfw will be deducted because it is supposed to be Kfw55. So a better mixed interest rate. A rate of €850-900 would of course be even more comfortable. Sparkasse would most like to make me like 30 years :confused:. What costs the [Bausparvertrag] now contains can be irrelevant to me, I am only interested in the effective [JZ]?! Otherwise, 15 years annuity loan and hope that interest rates are not high again in 15 years.

Which costs the building savings contract actually includes doesn't matter to me, I'm only interested in the effective interest rate?!

What kind of argument is that?

The only thing you should be interested in are the total costs incurred over the years, if you like even discounted (but that probably goes too far now).

Hey, I don't care about the running costs for my car, as long as the consumption is right. That comparison is a bit off, but the behavior is roughly the same.

You do understand that besides calculable parameters, the effective annual interest rate nowadays also takes into account assumptions that can be more or less arbitrarily made (or must be!).

Where did you get that from? At the moment that's probably true due to the historically low interest rate, but it does not apply across the board. The difference depends on the nominal interest rate and the agreed payment frequency.

That's not entirely correct. For example, we had 2 offers in the decision. Offer A had a worse nominal interest rate but a better effective interest rate than offer B. With offer B, there was a somewhat larger gap.

Upon inquiry, we were told that the institution had adjusted its systems so that, for example, fees for a possible mortgage charge were also included in the effective interest rate.

So always look closely and ask questions before comparing apples and oranges. We then decided on offer B.

And I am talking about mathematics. This is not history.

And if someone today (for whatever reason) gets 4.5%, then that might not even be 5 years ago.

Furthermore, if it is supposed to be that current, your statement no longer applies, since costs beyond the loan always have to be considered. So if there are no already existing land charges on the respective KI, these costs must always be taken into account.

:D