The dream of owning your own four walls is becoming more expensive. According to the financial service provider Interhyp, building interest rates for ten-year loans are currently just under 4.2 percent. Industry colleague Dr. Klein currently has an effective annual interest rate of 4.1 percent. For comparison: a year ago the corresponding interest rate was Dr. Still small at 3.4 percent. Within twelve months, building interest rates have risen by around 0.7 percentage points.
What higher building interest rates mean for buyers
If you currently want to finance a house or apartment, you have to take this into account. "And this is how the calculation is done very precisely. Prospective buyers check more intensively: Which property should it be? Which monthly rate makes sense in the long term in the budget?" explains Thomas Kreil from Interhyp in an interview with the ARD finance editorial team.
The money guide Finanztip uses a concrete example to show how significant the recent rise in interest rates can be: "We calculated this for financing of 300,000 euros. That's 250 euros more per month," says real estate expert Dirk Eilinghoff.
Why building interest rates are rising now
The main deciding factor for building interest rates is the long-term interest rate level on the capital market. Yields there have recently risen sharply. In mid-September, ten-year federal bonds temporarily yielded more than they had in 17 years. Rising long-term yields make bank refinancing more expensive - and thus also affect building interest rates.
The high energy prices as a result of the Iran war had recently increased concerns in the financial markets about prolonged inflation. Interhyp CEO Jörg Utecht is therefore not expecting a quick easing of tensions: "Buyers should be prepared for the level to remain above the four percent mark for the time being."
Demand for construction loans is declining
The Bundesbank's figures show that many potential buyers have already become more cautious: in the second quarter, demand for housing loans fell more sharply than in three years. At the same time, banks have tightened their credit standards. The net share of institutions with stricter requirements rose to seven percent - after four percent in the previous quarter.
The banks cited higher credit risks, increased refinancing costs and a lower risk tolerance as reasons. This means: It's not just the loan itself that becomes more expensive. In some cases it also becomes more difficult to even get the financing you want.
Energy efficiency is becoming more important for financing
The energy condition of the property is also increasingly playing a role. According to the Bundesbank, banks have further tightened their credit guidelines for properties with poor energy efficiency. For buildings with current or future high energy efficiency, however, climate aspects had a slightly easing effect.
Finanztip expert Eilinghoff also observes this connection: "The worse the energy efficiency, the lower the value of the property usually is." However, the bank also sees it that way - and accordingly provides less credit than for a well-renovated property.
Follow-up financing will be more expensive
However, the interest rate hike doesn't just affect buyers: follow-up financing is also becoming more expensive for owners whose fixed interest rates are expiring. However, after years of repayment, your remaining debt is often significantly smaller than it was at the beginning. Interhyp expert Kreil therefore comes to the conclusion: “In many cases, the actual additional monthly burden is much lower than a simple comparison of interest rates suggests.”
With a so-called forward loan, owners can secure the current interest rates for later follow-up financing today. But banks charge a surcharge for this. Whether this is worth it depends on how interest rates develop in the coming months.
And there are currently many uncertainties: If the Iran conflict eases, energy prices would fall significantly. That would dampen inflationary pressure and could pull down bond yields - and thus also building interest rates.
Follow-up financing: compare offers
Finanztip expert Eilinghoff therefore sees no reason to rush: "If I had another year left, I wouldn't take out a forward loan straight away, but would rather wait a few more weeks or months. That's still early enough."
However, waiting doesn't mean putting off researching follow-up financing. “The biggest mistake that borrowers make when it comes to follow-up financing is that they wait too long and then immediately respond to the offer from the previous financing bank and simply sign directly,” warns Eilinghoff.
Switching to another bank is often less complicated than borrowers assume. "You just have to transfer the mortgage. That usually costs a few hundred euros. But you can get it back very quickly thanks to a better interest rate."
Small difference in interest rates - big impact
Because with building interest rates of more than four percent, even small interest differences can add up significantly over many years. For potential property buyers, not only the purchase price but also financing is once again becoming a decisive factor. And if you don't need follow-up financing immediately, you shouldn't rush to secure today's high building interest rates for the future.
