People fix interest on mortgages for 5, 10 but even for 15 years.
July 2018 /
If someone is considering a mortgage or mortgage fixation, they should surely notice that interest has risen fastest over the past ten years. Some banks have raised rates four times over the past year. While at the end of last year it was possible to get the mortgage at 1.68 percent interest, such low interest rates are not available at the moment. The current average interest rate starts at about 2.5 percent. People who think about mortgages or consider refinancing the existing one should, according to the consultants, take their time, as there is estimated a 3.5 percent average rate at the end of this year.
Compare mortgage terms and choose the most advantageous.
This corresponds to the current fierce competition between banks, especially for mortgage loans with short-term and long-term fixation, and there are number of many special marketing campaigns. In April, UniCredit bank introduced mortgage rates of 2.19 percent for all fixation periods including a floating rate. In the same month, Wüstenrot decreased rate by 0.15 percentage points. Special marketing campaigns are announced by other banks. The new feature is already a fixation for fifteen years. "Generally, it is not possible to answer the question as to which fixation is more suitable because each client is different and has different needs, depending on whether it is a new mortgage loan or refinancing one.
The fact is that it one surely saves the money when they fix mortgage interest rates at 2.5 percent now than when they fixes them at the end of the year when interest rates are estimated at about three percent. Long fixation are much more comfortable then they used to be in the past, because it is possible to prepay the mortgage loan each calendar year, not just at the anniversary of the fixation. It's free of charge and you can prepay up to 25 percent of the initial principal. This is important for the client to save on interests if the client wishes to save just the interest on the mortgage because they are always calculated from the outstanding amount of the principal. Anyone who decreases the principal by an extraordinary prepayment also decreases the amount of money he or she pays on the interest no matter for how long the rate is fixed.