Are real estate loans even cheaper?

In the past eight years, since the onset of the financial crisis, mortgage rates have fallen significantly. If, for example, customers who took out a real estate loan in 2008 paid an interest rate of more than four percent on average, then real estate loans today are already less than one percent. Nevertheless, consumers and many experts are wondering if mortgage rates could continue to fall in the coming months or even years.

Favorable interest rate currently under 0.8 percent

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Looking at current mortgage rates, comparisons and special loan portals show that the best interest rate on a ten-year real estate loan has now fallen below the 0.8 percent mark. More and more often, customers can carry out a real estate financing, in which the real estate loan only has to pay an interest rate of less than one percent. Of course, this does not apply to all mortgage lending, as the banks require the following factors in particular if they make their best and thus most favorable lending available:

  • Impeccable SCHUFA information
  • Equity ratio of at least 20-25 percent
  • Regular income
  • Mortgage as collateral for the loan

However, these requirements can be met by many customers, so they can actually calculate with a loan rate between 0.8 and 1.5 percent. However, whether or not interest rates will decline even further, despite the already very low level, depends above all on the economic development in Europe.

ECB policy rates as the benchmark par excellence


By far the biggest influencing factor, which has always had an impact on the level of property interest rates, is the ECB key interest rate. In the meantime, this has been just 0.0 percent for almost a year, meaning that banks can borrow money from the ECB free of charge.

The fact that the key interest rate is again at such a low level can be explained by the fact that the economy in the EU region is stagnating or is only recording a very sluggish pace.

This has been the case for many years now


So that in the past the European Central Bank had little choice but to lower its key interest rates. In parallel with this, mortgage rates have also developed, so that they have dropped in the last eight years from an average of more than four to an average of less than 1.5 percent.

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