Current Home Loan Conditions as of November 2023: Comparing Fixed and Variable Interest Rates

On September 30, 2022, the 3-month Euribor – which is the relevant reference value for variable interest loans – was exactly 1.173 percent, a year later this value more than tripled and amounted to 3.952 percent on September 29, 2023 (= an increase of 2.779 percent).

Loan conditions for an amount of 300,000 euros

The credit experts at the Upper Austrian Chamber of Labor took this general development as an opportunity to survey the current credit conditions (as of early/mid-October 2023). Offers were obtained from 8 banking institutions and 4 building societies for a loan amount of 300,000 euros and a term of 30 years with both variable and fixed interest rates for 10, 15, 20 and 25 years – provided that the borrowers have good creditworthiness.
All costs incurred when concluding the contract were added to the desired payment amount of 300,000 euros (increasing the remaining debt).

Variable loans: Banks want higher profits

The range of variable interest rates currently ranges between 5 percent (VKB-Bank and UniCredit Bank Austria) and 6 percent (Sparkasse Oberösterreich). For comparison: a year ago there were loans with variable interest rates starting at 2 percent.

In addition to the increased reference values, some banks have increased their profit margins. Above all, Sparkasse Oberösterreich, which increased its surcharge by 0.5 percent to 2 percent.

At VKB-Bank, Oberbank, Raiffeisenlandesbank Oberösterreich and Volksbank Oberösterreich, the markups on the reference value remained unchanged compared to our survey from the previous year, while UniCredit Bank Austria and Hypo OÖ increased their profit margins slightly (each by 0.125 percentage points).

Development of the loan rate as interest rates rise

In our survey last year, UniCredit Bank Austria sent us the cheapest variable interest offer (interest rate: 2,000 percent; monthly rate: 1,157 euros). A year later, the interest rate at UniCredit Bank Austria is 5 percent, and the monthly rate is now 1,674 euros. The interest rate increase of 3 percent led to an increase in the monthly rate of 517 euros.

Fixed interest loans: lower interest rate than variable loans

It is rare for long-term loan interest rates to be lower than short-term ones. Such an inverse interest rate structure currently exists. This means that fixed-interest loans currently have a lower interest rate than variable-interest loans.

In the case of fixed interest loans, attention should also be paid to the markup on the reference value after the fixed interest period has expired. This is all the more important the longer the remaining term of the loan with variable interest rates is.

Bau­spar­darlehen

3 building societies have sent us conditions for a fixed interest rate of 20 years. Compared to the offers from banks, they are among the cheapest in the area of ​​20-year fixed interest rates. However, all 3 building societies charge processing fees of 9,000 euros at the start of the contract. They are therefore many times higher than those of the banks.

Negotiate annual penalty-free special payments

As a consumer, you have a legal right to early repayment of your loan in full or in part. However, the legal provisions also allow the agreement of an early repayment penalty (penalty) for special payments amounting to a maximum of 1 percent of the loan amount repaid early if the agreed notice period (for variable-interest loans: a maximum of 6 months; for fixed-interest loans: agreed fixed interest period) is not adhered to becomes.

Credit: How to find the cheapest one

• Obtain several offers and make sure that the conditions are the same (loan amount, term, collateral, etc.) so that a comparison is possible.
• When obtaining an offer, insist on providing the pre-contractual information (ESIS information sheet), in which all essential loan conditions such as interest rate, costs, required security, early repayment conditions and so on are disclosed and request a detailed repayment plan.
• Negotiate not only about the target interest rate, but also about additional costs.
• If necessary, agree with your bank on the possibility of special repayments without observing a notice period and have this noted in the loan agreement. Without a special agreement, a penalty of up to 1 percent of the amount repaid early can be expected.
• Remember that you are entering into a contractual relationship that will last for decades and are looking for a reliable partner. Therefore, don’t just pay attention to the price, but also consider “soft facts” such as the knowledge and experience of the credit advisors as well as the accessibility and decision-making authority of the bank branch in the decision.

AK helps when comparing offers

Comparing loan offers is not easy, even with good prior knowledge and intensive study of the topic. At the same time, you can save a lot of money by negotiating. The consumer protection department of AK Oberösterreich therefore offers all members individual advice and the comparison of loan offers.

Ab­schließender Hin­weis