After the average loan amount for real estate financing has decreased slightly in the last two months, it is now picking up again: in October buyers and builders raise an average of around 262,000 dollars for their own home – 3,000 dollars more than in the previous month and exactly as much as in August. The reason is the further increase in real estate prices, as is also the case with the DTI. For comparison: Five years ago, in October 2014, the loan amount was almost 100,000 dollars less (167,000 dollars).
Anyone who thinks: “Everything used to be cheaper in the past” is right, at least when it comes to property prices. At the time, mortgage lending itself was much more expensive. If you compare the current standardized rate for a loan of 150,000 dollars, two percent repayment, 80 percent loan maturity and ten years of fixed interest rates with the 2014 rate, there is a difference of 116 dollars – in favor of today’s loan: in October the monthly standard rate is 399 dollars (plus 5 dollars compared to September), five years ago it was 514 dollars.
Initial repayment and fixed interest rates remain high
The initial repayment with which borrowers pay off their real estate loan is 2.87 percent, which is slightly less than in the previous month. This high initial value increases further with an annuity loan: the more that has already been repaid, the less interest is due on the remaining amount. Because the monthly rate remains constant, an increasing proportion of the rate is used for further repayment. In plain language, this means that borrowers finance security-consciously and structure their financing in such a way that they repay the loan quickly.
The still long fixed interest rate – for the third time in a row it is more than 14 years on average – speaks for the trend towards security-oriented financing. The low interest rates favor the decision to set the current interest rate for a long period. Because long interest rate security always costs a little more – in view of the currently low level, the interest rate does not skyrocket even with the spreads.
Debt-financed share of the loan continues to increase slightly
For younger interested parties in particular, equity is and remains the critical point when it comes to home financing. Real estate prices continue to rise. If you want to contribute a relevant part of it from your own pocket, you have to save considerably more than ten years ago. To the same extent as prices, notary fees, brokerage fees and real estate transfer tax become more expensive – the latter have been increased by the federal states over the years. In summary, this means that anyone who can bring in 20 percent equity in addition to the ancillary costs has saved a medium five-figure range, at least in conurbations. And very few of them. The development of the loan-to-value ratio reflects this: the debt-financed share has been increasing gradually for around two years and has been more than 84 percent for six months; 84.62 percent in October, 0.15 percentage points more than in September.
Forwards in record low, lender bank loans catch up
It is not surprising that the demand for forward loans remains in the basement – at 6.41 percent it is lower than ever – given the stable interest rate level. Because a significant increase is not expected in the short term, most follow-up financiers wait to reduce or avoid forward premiums. However, if you do not want to deal with the topic for long, but rather want to get future follow-up financing under favorable conditions, you will currently find very good conditions. Annuity loans remain in strong demand at 83.22 percent.
In October, the government-funded loans from lender bank made up ground again: after only making up around 3.5 percent of the total financing volume a year ago, moving between 4.5 and 5 percent in the past few months, they are now playing with a share of 6 , 32 percent again a bigger role.