Building loan: The volatility of the interest costs money.
When it comes to building loans, there is always talk of low interest rates and the cheap money policy of central banks. Families who want to move into their own home are currently financing residential property cheaply.
What is the trend for the future?
Many experts disagree about how the market will continue. In the summer of 2015, interest on the building loan jumped upwards, but has since fallen again. This volatility creates confusion but is not uncommon.
Volatility in construction money – interest rates will continue to fluctuate in the future
Investors are particularly familiar with the concept of volatility. Used here for fluctuations in prices, households first have to get used to this vocabulary when it comes to building loans.
But : fluctuations, such as have been observed in the past few months, should also belong in the future. The reason is found relatively quickly.
The level of interest rates on the building loan depends on a variety of factors. In the meantime, very small changes in the fandbrief yield segment are enough to turn the interest rate screw. This fact means that the potential for volatility increases.
Influences include:
- the Cream Bank monetary policy
- the inflation rate.
Both factors will be able to drive the interest rate on mortgage lending in the future. What effects does volatility have on individual households?
Volatility in building money: Securing building interest at an early stage
Loan interest rates for mortgage lending are expected to rise in the foreseeable future. In view of the low interest rates, there is hardly any way around this finding.
It is only a matter of time before the trend changes. Interest rate volatility also means that households have to keep a close eye on the construction money market. If a low interest rate is indicated in the chart, a corresponding reaction pays off.
Anyone who wants to push the home project over the next twelve to 24 months can secure a low building interest rate – via the forward loan. This fixes the loan terms well before the actual call date.
- An interest surcharge generally applies to the advance period. From the point of view of the borrower, it must always be checked to what extent this surcharge consumes the interest bonus.
Building or buying your own house requires a lot of preparation. And even if this project has to be planned individually, there are some points that should definitely be considered in advance. Because errors in the calculation for the building loan can be expensive. With the help of this checklist you can calculate your budget exactly and go well prepared to the counseling session at the bank.