Which fixed interest rate on the real estate loan suits me?

The vast majority of loan offers in the field of mortgage lending stipulate a fixed interest rate of ten years. This is a typical standard value that is widely used. However, it is not absolutely necessary to fix the interest on the mortgage loan over a period of ten years; of course, completely different periods are also possible. In today’s post we would like to inform you about the individual options.


Short fixed interest rates: approx. 5 years or less

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Choosing a short rate fixation can be tempting, because the shorter the hedge period, the better the interest rate. In other words, the shorter the rate fixation, the lower the loan rate.

However, the interest rate risk increases with the short period. If market interest rates rise, follow-up financing will become more expensive. In view of the high loan amounts and the usually long repayment periods, most builders and buyers are well advised not to set a short fixed interest period.

Short fixed interest rates are basically only attractive for those who only want to finance for a short time or who have extensive financial resources and can quickly repay their loan in an emergency. Then it is possible to take advantage of small interest advantages or simply to use the existing capital elsewhere in the meantime.


Standard fixed interest rate of 10 years

Standard fixed interest rate of 10 years

Not surprisingly, this variant is recommended so often. Basically, a comparatively high level of security is guaranteed. Real estate buyers are covered for a full ten years and can take care of repayment during this time. However, this should also take place to a sufficient extent.

Anyone who hardly repays and will therefore still be looking at a large amount of remaining debt after ten years should not take any risks. Then it makes sense to either take out additional coverage (eg by means of a building society contract) or alternatively to choose a longer fixed interest rate.


Long fixed interest rates of 15 years or more

Long fixed interest rates of 15 years or more

This would basically explain when it is advisable to choose an above-average fixed interest rate. Young people in particular, who are still a few years away from retirement, can obtain maximum security with a fixed interest rate of 20 years or more and then take repayment a little more slowly if necessary.

In some cases, a so-called full repayment loan is available. It is designed so that the loan amount is fully repaid by the end of the fixed interest period. Many banks welcome it when customers want to repay themselves ambitiously and therefore sometimes grant an interest rate advantage for full repayment loans.


Your financing customized

Your financing customized

We would be happy to support you with construction finance. Our specialists determine the optimal financing, taking into account your individual needs. Our advice is not about the banks, but about your interests. We work out tailor-made financing proposals and compare conditions from over 400 banks and other financing partners. This is how we give you access to suitable and also affordable construction finance. We look forward to your inquiry.

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