The European Central Bank (ECB) is unlikely to cut its key interest rate this week. However, there are signs of a trend reversal in loan interest rates. Getty Images
The European Central Bank (ECB) will decide on key interest rates for the first time in the new year this Thursday. ECB boss Christine Lagarde has recently dampened hopes of imminent interest rate cuts.
However, there are already signs of a trend reversal in loan interest rates for consumers towards falling interest rates. These are the figures from the Bundesbank and analyzes from the comparison provider Smava.
According to this, almost every second bank wants to lower its loan interest rates in the coming months. No bank is planning further interest rate increases.
Anyone who wants or needs to finance a purchase with a loan in the coming weeks and months can hope for slightly lower loan interest rates. Although the European Central Bank (ECB) is likely to keep key interest rates at a high level for some time, there are currently signs that loan interest rates are turning towards falling interest rates. This emerges from data from the Bundesbank and analyzes from the comparison provider Smava.
Sea Bundesbank Consumer loans became around 16 percent more expensive over the course of 2023, writes Smava. However, the most recent data indicated a trend reversal. The rise in interest rates has already weakened. And a Smava survey of banks showed. In the next three months, the majority of banks surveyed expect loan interest rates to remain stable, and in many cases even to fall.
41.7 percent of the banks surveyed said they were likely to reduce interest rates on new loans in the next three months by up to 0.6 percentage points. All other banks currently wanted to keep loan interest rates constant. “How much interest you have to pay on your own loan will probably depend even more on which bank you go to,” writes Smava.
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According to the Bundesbank’s figures, the rise in loan interest rates has been weakening since October 2023. Consumer loans currently cost an average of just under nine percent interest. Data from Smava shows that consumers could also get significantly cheaper loans, sometimes with interest rates of between six and seven percent.
“Banks charge very different interest rates for the same loan,” says Smava boss Alexander Artopé. “The interest rate differences could become even larger in the coming months.” This also represents an opportunity for consumers. Those who compare “are very likely to pay less for a loan than those who forego a loan comparison,” says Artopé.
The European Central Bank will decide on key interest rates for the first time this year this Thursday. The significant decline in inflation to 2.9 percent in the euro zone and the weak economy in Europe had fueled hopes that the ECB would soon cut interest rates. However, ECB President Christine Lagarde described these expectations as exaggerated and unhelpful on the sidelines of the World Economic Forum in Davos. The ECB only announced the first interest rate cuts for the summer.
After all, the period of rising interest rates is likely to be over for now. According to Smava, these savings opportunities currently exist for consumers between low and averagely expensive loan interest rates.
Example calculation for a 5,000 euro loan over 36 months:
- Interest costs for a cheaper loan (6.0 percent): €463.00
- Interest costs for expensive loans (9.0 percent): €694.57
- Difference: €231.57
Sample calculation for a 10,000 euro loan over 84 months:
- Interest costs for a cheaper loan (6%): €2,207.28
- Interest costs for expensive loans (9%): €3,365.58
- Difference: €1,158.30
Example calculation for a 30,000 euro loan over 84 months:
- Interest costs for a cheaper loan (6%): €6,621.85
- Interest costs for expensive loans (9%): €10,096.75
- Difference: €3,474.90
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2024-01-22 11:00:50
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