The financial question: the low lending rates can be a trap

The low-interest rates obscure the view of many. They borrow more money than they were supposed to afford. Because indebtedness and insolvency are great dangers.

The low-interest rates are the one suffering and another man’s meat. Those who invest money, attracting a pout on the investment interest, as they say in Berlin, and who needs capital, cannot complain about the lending rates real, as it is ibid. The interest on home equity loans has fallen to a level that was conceivable neither beer nor Korn five years ago. At the time, cost loan with a fixed interest rate of five years, about 3.5 percent per year. Today it is 1.3 percent annually. Mortgages with interest rates fixed for ten years hit 4.1 percent per year to book. Currently, the rates are at 1.7 percent annually. Loans with a fixed interest rate of 15 years were offered for 4.6 percent per year. Now 2.4 percent required annually.

The financial question: Fear of debt and equity costs a fortune

These are huge differences, and the low rates are warning out a warning here, for many people the opportunity to treat yourself to a home on credit, they really can not afford. The beautiful interest obscure the view of the pitfalls of matter. This becomes clear when strolling on the home page of that bank, which has taken up the cause of providing the power of passion. “I want our dream house enjoying” because the father says to his Steppke, “without having to constantly think about the financing.” Read the “top conditions”: 100,000 EUR, borrowing rate of 1.11 percent per year, nominal fixed interest rate five years maturity of 25 years, the monthly installment of 383 euros. What can I say? Best not much, if possible, but enough that the interest of passionate Bank can bring the sleeping father in a few years if things do not work out the way the presented the participants.

Pay off for a home to retire

The “non-binding” offer is valid for a financing requirement of 50 percent of the purchase price and the term of 25 years applies on condition that interest rates in the next 25 years never rise above 1.11 percent. That means in plain language that the Super Offer – said in good German – is pretty sewn on edge. Who has only 50,000 euros in his pocket, but wants to buy a house that costs 300,000 euros must look around where and at what price he gets the “open” 100,000 euros, and should interest rates in ten years “regrettably” in have risen 3 percent, the loan just not in 25 but only in 36 years will be off the table.

is the interest rate risk and remains Eigenheimer by far the greatest risk, especially in times when the starting rates are as low as at the moment. The follow-up costs, when the fixed interest rate will be over, rise, depending on the market or fall. While this is old hat to any person skilled in the art. Only the consequences of many private citizens are not aware because the dangers lie in the future and are hidden from consciousness. In this case, the first risk looming in five years. The outstanding balance of the loan will stand at 82,000 euros. If the start rate is maintained of 382 euros, the loan will run for a connecting rate of 2.5 percent for another 24 years. In a subsequent interest rate of 3.5 percent, the remaining term climbs to 28 years and with a Prolongationszins of 4.5 percent, the remaining debt will be the earliest in 36 years from the table. Consequently, the Eigenheimer who already 35 or 40 years under his belt, can be employed to retire in with the repayment of debt.