Use debt or forward loans - which option is appropriate?

Use debt or forward loans - which option is appropriate?

Once the dream of having your own house is fulfilled, children have grown up in it and loving handwork has been invested, an important decision is usually made at the same time. Buyers who have to pay unfavorable interest rates are currently increasingly looking for the right form of debt restructuring . Follow-up loans can also count, but this requires an analysis of the circumstances. What you have to look out for, so that you can continue to work carefree on the dream of paid home.

The interest rate set in motion

Historically low interest rates, which have for months inspired the market for builders and homebuyers, make an investment in apartments and houses currently as cheap as never before. Due to the European printing press, which prints more and more money and lends it to banks at low interest rates, currently benefit the majority of real estate owners. However, there is an end soon, as the ECB plans to buy up government bonds of European countries if necessary, thereby indirectly supporting the price level. As interest rates on construction loans are geared in many ways to this trend, with the result that bonds issued by the Federal Republic of Germany are rising, the interest rates on mortgages continue to rise.

At the same time, the brisk demand is to simple market effects, so that many real estate financiers have raised their terms. This shows the favor of the hour, the owners have in current financing, even on favorable terms to carry out follow-up financing or debt restructuring. Many cases have shown that a ten-year loan of EUR 200,000 can still capture interest rates of 2.5 percent - but it is urgent that an increase of 0.5 percentage points increases the price to 10 years, from around 10,000

First steps are therefore to get the old credit agreement out of the drawer and familiarize yourself with the conditions and the contract. Here you first check whether an adjustment or a new conclusion on more favorable terms is even possible. However, there are first complications, because not every bank can be credited with such a financial optimization & ldquo; on. The certainty, however, that long-term and satisfied customers pay off rather than entertaining commitments, brings the banks into the, depending on the contract, flexible situation, so that the chances for a new deal are favorable.

The spoiled choice among the variants

On the one hand, the types of financing commonly used in German mortgage lending rely on the borrower switching to a cheaper loan and making prepayment penalties to the bank. On the other hand, there is the possibility of agreeing with a bank on interest and fixed interest rates, and then assuring the acceptance of a follow-up loan, which replaces the original financing at the end of the fixed interest period . In this model, the borrower speculates at the time of the change higher interest rates, so that his contractually agreed contract adjustment also pays for him.

However, it is also advisable to make sure in new contracts that formulations and points of the original contract were adopted. The sticking point lies therefore not only with the interest rates, but above all on the basis of changing legal conditions conditions for real estate loans . Therefore, make sure that things like a special repayment continue to be possible with the known modalities in order to save interest here as well.

Option: Early repayment

Homeowners who had to pay 5 percent interest on a loan of 200,000 euros in 2002 and who paid a constant 1,000 euros monthly installment paid interest in excess of 80,000 euros. If we now look at the prepayment penalties, a total of 15,000 euros and more may be due for this sum. What appears lush at first glance, however, gives you a noticeable discharge right at the moment - so the question is whether this relief exceeds the amount paid or not.

You should pay particular attention here that you have already paid some interest because of the long term, so that the prepayment penalty must also be considered in relation to the remaining term of the fixed interest period . As a rule, there are only advantages if you document debits and balances on a monthly basis in order to see whether a change is worthwhile in comparison to current offers.

Option: Use forward loans

A borrower paid In 2004, a total of 200,000 euros, with the help of a loan, and had to pay for it also 5 percent debit interest. The assumed monthly installment is 1,000 euros and the choice fell on a forward loan from 2014 onwards. A follow-up loan of 2.95 percent was agreed, with an equally long fixed-interest period of 10 years. Now consider the interest charge in both periods and calculate it Saving Potential .

Once you have understood this principle, you only need a precise calculation. There is a useful online calculator that you can either fill with your credit details.


So what matters is how you assess the development of the real estate market for a period of at least 10 years. Depending on your personal sense of security, you then opt for one of the above variants, and have planning security, at least in the case of the forward loan. A plus, especially those who finance their loan hard on the load limit - you take unnecessary risks with a possible rescheduling because you can not usually estimate the interest level adequately.

Therefore, be fundamentally critical and question the basis of calculation of a prepayment penalty offered by the bank, so you may be given arguments to push that amount down. Finally, as you plan your financing project, you need to consider how to plan a period of often 20 years or more. Therefore trust the experiences of your family and friends as well as the publicly available market data and descriptions of other homeowners.

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